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2018 therefore ranks among the ten costliest disaster years in terms of overall losses, and was the fourth-costliest year since 1980 for the insurance industry.

The overall economic impact was US$ 160bn, of which US$ 80bn was insured, significantly higher percentage than the long-term average of 28%. North America accounted for 68% of insured losses, Asia for 23% and Europe for 8%.

Regrettably, 10,400 people around the world lost their lives in natural disasters this year.

 Number of events

The Munich Re NatCatSERVICE registered 850 events in 2018. Storms made up 42%, floods, flash floods and landslides 46%, while 7% fell into the categories of heat, cold and wildfire. The continents most affected were Asia (43%), North America (20%) Europe (14%) and Africa (13%).

 North America (including Central America and the Caribbean)

163 natural catastrophe events were registered across the American continent, producing overall losses of US$ 82bn, of which US$ 53bn was insured. More than 800 people lost their lives.

The Camp Fire in California in 2018 caused the highest overall wildfire loss on record.

 South America

South America experienced an extremely low number of natural disasters in 2018. The NatCatSERVICE database registered just 51 significant events. A total of 144 people were killed and losses amounted to some US$ 1bn.

 Europe

Europe, with a total of 113 events and overall losses of US$ 16bn (€13.5bn). Some US$ 6bn (€5bn) was paid out in insured losses. In mid-October, the remnants of Tropical Storm Leslie battered France, Portugal and Spain. Further storm developed that primarily affected Italy, Croatia and Slovenia along the Adriatic coast. The deadliest events in 2018 also included the wildfires in Greece, which claimed 100 lives, and a cold snap in February and March that led to 77 fatalities. 

 Africa

Around 100 significant events were registered for the continent of Africa. Almost 1,200 people were killed, the majority in flood events and flash floods in Nigeria and Kenya.

 Asia

Asia was the worst-affected continent in terms of the number of events. It accounted for 43% of all events worldwide and for 74% of fatalities in 2018. Overall losses came to US$ 59bn., US$ 18bn of the total was insured. In Japan, even though just 14 events were registered, suffered US$ 34bn in losses in, of which US$ 16bn was insured.

Indonesia was hit extremely hard by tsunami events. In September, a tremor near the city of Palu and a subsequent tsunami and further tsunami occurred after the volcano Anak Krakatau erupted. Both these events claimed more than 2400 victims.

 Australia/Oceania

Around 40 events in Australia and Oceania caused overall losses of approximately US$ 1.5bn, of which US$ 540m was insured. Main events: a hailstorm in Sydney, earthquake in Papua New Guinea, and Cyclone Gita on Tonga.

First quarter saw $3.28 billion of 144A securities issued across six transactions covering extreme morbidity, earthquake and U.S. multiperil, according to the report Insurance-Linked Securities Market Update Volume XXIX, August 2018, from Swiss Re.

Second-quarter issuance reached $4.03 billion in 14 transactions covering mainly U.S. multiperil or state-specific wind coverage, the report said.

The $3.28 billion of first-quarter issuance was the largest on record, while second quarter’s $4.03 billion trails only last year’s record second-quarter issuance of $6.23 billion.

“That said, issuance for the first and second quarters are generally larger than the latter half of the year, with sponsors seeking coverage ahead of the U.S. hurricane and severe thunderstorm season,” the report noted.

The total of $10.5 billion for 2017 was also the first year during which issuance topped $10 billion annually, according to data in the report.

As of June 30, 2018, there was $29.11 billion of issuance outstanding compared with $26.9 billion as of June 30, 2017, the data showed.

Indemnity triggers accounted for the majority of value for first-half issuance at $4.6 billion, followed by parametric triggers at $1.36 billion and industry index triggers at $1.3 billion, the data showed.

American International Group Inc. cut back on unprofitable lines of business and bought more reinsurance protection during the fourth quarter last year as the new management team continued its efforts to turn the insurer around.

Discussing AIG’s fourth-quarter results in a conference call with analysts on Friday, including a $6.66 billion loss compared with a $3 billion loss in the same period in 2016, largely due to a one-off charge related to the recent tax reform law, Brian Duperreault, president and CEO of AIG, was upbeat about the insurer’s prospects.

“I feel confident that we have a good handle on where the issues are line by line, country by country … we’ve got the structure, we’ve got the understanding. Now we’ve just got to execute,” he said.

Since his return last May to AIG, where he spent the first two decades of his career, Mr. Duperreault has undertaken a review of the insurer’s business and recruited a significant number of senior executives to manage it.

Excluding the charge for the tax law’s effect, adjusted after-tax income was $526 million for the 2017 fourth quarter, compared with an adjusted after-tax loss of $2.8 billion in the 2016 fourth quarter. For the full year, AIG reported a loss of $6.08 billion, compared with a loss of $849 million in 2016. On an adjusted basis, it reported a loss of $232 million, compared with a $2.4 billion loss in 2016.

AIG reported $762 million in catastrophe losses for the quarter, including $572 million related to the California wildfires.

Its general insurance unit, which includes its commercial and personal lines property/casualty business, reported an adjusted profit of $13 million in the quarter, compared with an adjusted loss of $4.8 billion in the prior year quarter.

Reviewing the property/casualty unit’s operations over the quarter on the conference call, Peter Zaffino, CEO of general insurance, said: “Cat losses significantly impacted our 2017 performance; however, going forward you can expect us to more thoughtfully manage frequency and severity of cat exposure through our reinsurance strategy and the management of our gross exposures,” he said.

At the Jan. 1, 2018, reinsurance renewals, “we began executing on our strategy by reducing severity and frequency exposures on our North American cat and net retention on our property per risk and also obtained a new catastrophe cover for international cat,” Mr. Zaffino said.

The additional reinsurance, taking into account the announced acquisition of reinsurer Validus Holdings Ltd., will reduce AIG’s probable maximum loss exposure by 20%, he said.

The changes to the reinsurance program included changing the limits it bought from occurrence, which responds to individual events, with no reinstatement to a mix of occurrence coverage and annual aggregate coverage, which responds to multiple losses over a year, with one reinstatement.

In light of its reinsurance strategy and actions to manage the overall portfolio, AIG expects premium volume to be flat in 2018.

Munich Re estimates that global insured losses for 2017 will total US$135 billion, due in large part to hurricanes Harvey, Irma and Maria, and the earthquake in Mexico.

Total losses for the year are estimated to be US$330 billion – the second highest year on record.

“This year’s extreme natural catastrophes show how important insurance is in absorbing financial losses in the wake of such disasters,” Munich Re board member Torsten Jeworrek said in a news release.

Insured losses for the year were almost three times the average of US$49 billion. Fifty percent of the losses came from the U.S., a country that normally accounts for 32% of global insured losses.

Much of this was due to the hurricane season. Hurricane Harvey was the costliest natural disaster of 2017, with overall losses of US$85 billion. Irma was the costliest hurricane in terms of insured losses, which reached US$32 billion.

“For me, a key point is that some of the catastrophic events, such as the series of three extremely damaging hurricanes, or the very severe flooding in South Asia after extraordinarily heavy monsoon rains, are giving us a foretaste of what is to come,” Jeworrek said.

Hackers tried to steal 55 million roubles ($940,000) from Russian state bank Globex using the SWIFT international payments messaging system, the bank said on Thursday, the latest in a string of attempted cyber heists that use fraudulent wire-transfer requests.

Globex President Valery Ovsyannikov told Reuters via the press service that the attempted attack occurred last week, but that "customer funds have not been affected."

The bank's disclosure comes after SWIFT, whose messaging system is used to transfer trillions of dollars each day, warned late last month that the threat of digital heists is on the rise as hackers use increasingly sophisticated tools and techniques to launch new attacks.

SWIFT said in late November that hackers continued to target the SWIFT bank messaging system, though security controls instituted after last year's $81 million heist at Bangladesh's central bank have helped thwart many of those attempts.

Sources familiar with last week's attack on Globex said the bank had spotted the attack and been able to prevent the cyber criminals from stealing all the funds they had sought, according to a report in the Kommersant daily. The hackers withdrew only about $100,000, the report said.

SWIFT representatives declined to discuss the Globex case.

“We take cyber security very seriously, and we investigate all threats very seriously, taking all appropriate actions to mitigate any risks and protect our services," the group said in a statement emailed to Reuters. "There is no evidence to suggest that there has been any unauthorized access to SWIFT’s network or messaging services."

While SWIFT has declined to disclose the number of attacks or identify any victims, details on some cases have become public, including attacks on Taiwan's Far Eastern International Bank and Nepal's NIC Asia Bank.

Shane Shook, a cyber expert who has helped investigate some hacks targeting the SWIFT messaging network, said that at least seven distinct groups have been launching such attacks for at least five years, though most go unreported.

Chubb Ltd has entered into a ten-year strategic co-operation agreement with China’s largest property and casualty insurance company.

In a statement, Chubb said the agreement would allow the leveraging of Chubb’s global capabilities in support of PICC Property & Casualty Company’s customers and other Chinese-affiliated companies around the world. It added that this would be in line with the Chinese Government’s drive to promote the country’s “Going Out” and “One Belt One Road” initiatives.

Evan Greenberg, chairman and CEO of Chubb, said: “For Chubb, this strategic co-operation agreement is a substantial opportunity to bring the full breadth of our capabilities and global network to bear in meeting the complex insurance needs of China’s largest and most successful companies.

“With this agreement, PICC now has the ability to offer its clients access to our industry-leading capabilities in countries beyond China. We greatly look forward to working with our new partners.”

Reinsurers are continuing to diversify their portfolios as they look to improve underwriting performances, according to a half-year market report from Willis Re.

“Due to ongoing pricing pressure, reinsurers continue to moderate their exposure to catastrophe-exposed business, including for their US business,” the report says.

Diversification has targeted structured property and casualty, life, health and specialty lines such as cyber and mortgage business.

Premium growth for some companies is also supported by the further allocation of capital to primary insurance business.

Net written premium for companies in the Willis Reinsurance Index increased 2% to $US129.8 billion ($162.4 billion) in the half.

The reported combined operating ratio increased to 95% from 94.1% after a negative impact from the UK change in the Ogden rate, used to estimate injury compensation payouts, and despite a reduction in natural and man-made catastrophe losses and reserve releases.

Net income declined to $US8.3 billion ($10.4 billion) from $US14.5 billion ($18.1 billion), while continued active capital management returned $US10.8 billion ($13.5 billion) through share buybacks and dividends.

Shareholder funds totalled $US348.2 billion ($435.6 billion) at the half-year, a 1.2% increase from the end of last year, while alternative capital increased to $US75 billion ($93.8 billion) from $US70 billion ($87.6 billion) at the previous half-year.

Insured natural catastrophe losses fell to $US20 billion ($25 billion) compared with $US30 billion ($37.5 billion) in the corresponding half last year, and significantly below the 10-year average of $US29 billion ($36 billion).