Turkey Earthquake Tops 2023 Insurance Industry Losses Outside US: CRESTA

The largest non-US natural catastrophe in 2023 was the Kahramanmaras Earthquake Sequence in Turkey on Feb. 6, which generated an industry loss of US$5.8 billion, the largest ever cat loss for the Turkish insurance market, according to CRESTA, the Zurich based insurance industry organization that provides a global standard for risk accumulation zones and natural catastrophe industry losses.

In 2023, there were seven events with industry losses exceeding this loss threshold, listed here in chronological order:

• North Island Floods, New Zealand, January 2023
• Kahramanmaras Earthquake Sequence, Turkey, February 2023
• Cyclone Gabrielle, New Zealand, February 2023
• Northern Italy Severe Convective Storms, July 2023
• Beijing-Tianjin-Hebei Floods (Typhoon Doksuri), China, July-August 2023
• Hurricane Otis, Mexico, October 2023
• European Windstorm Ciarán, November 2023.

A further two events in 2023 – severe convective storms in Germany in mid-June and severe convective storms in Eastern Australia in late December – have the potential to exceed the US$1 billion loss level and are currently under investigation.

In terms of the overall figure for the billion-dollar-plus events, the international loss tally for 2023 amounts to US$16.7 billion. This is marginally below the annual average of US$17.1 billion (adjusted to 2023 values) for the last 23 years.

The largest non-US event catastrophe loss in 2023 was the Turkey earthquake on Feb. 6, which generated an industry loss of US$5.8 billion, said CRESTA. It is followed by the severe convective storms which hit Northern Italy from July 19-25, which are estimated to have generated an industry loss of US$2.7 billion, also a record-breaking figure for the Italian insurance market. Similarly, New Zealand experienced two record-breaking weather events in early 2023 with a combined industry loss of US$2.7 billion.

Tropical cyclone losses in 2023 were dominated by Hurricane Otis in Mexico in October, also a record loss event for the country on an original loss-cost basis, and the floods in Beijing and surrounding areas following Typhoon Doksuri in early August. By contrast, Japan experienced a benign typhoon season with no typhoon losses above the US$1 billion mark.

“While from a global perspective, international cat losses in 2023 were slightly below the long-term average, several countries experienced record-breaking events, namely Turkey, Italy, New Zealand and Mexico,” commented Matthias Saenger, manager at CRESTA CLIX.

“This situation effectively illustrates the value proposition of global reinsurance: extraordinary or even record-breaking cat losses on a national market level can represent quite ‘normal’ loss levels in a globally diversified reinsurance portfolio. This scenario was the case in 2023 and explains why this year’s cat losses were managed so robustly,” Saenger added.

About CLIX

CLIX is a service provided by CRESTA, which offers benchmark information on natural catastrophe losses incurred by the global insurance industry. The CLIX database provides key information for all major cat events since 2000. The geographic coverage of the database is global, excluding the US. CLIX industry losses are reviewed quarterly up to a maximum of three years after the event. Access to the CLIX database is via subscription.

About CRESTA

The CRESTA organization was established by the insurance and reinsurance industry in 1977 as an independent body for the technical management of natural catastrophe insurance. Its manager is PERILS CRESTA AG, a subsidiary of Zurich-based PERILS AG. CRESTA’s main goal is to establish and maintain a uniform global system for the exchange, comparison, visualization and modeling of aggregated insurance data used for risk accumulation control and risk assessment, among other uses.

Photograph: A man walks past debris from destroyed buildings in Antakya, southeastern Turkey, on Tuesday, Feb. 21, 2023, after the deadly earthquake hit the region. (AP Photo/Unal Cam)

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