Moody’s RMS 2022 Catastrophe Review: Another Example of 'It Only Takes One'

'It only takes one.' This mantra was already top of mind for the insurance industry after 2021 and Hurricane Ida, and once again it turned out to be very apt for the 2022 North Atlantic hurricane season.

Following a highly uncertain forecast on its approach to the Florida coastline, Hurricane Ian, unfortunately, delivered catastrophic wind, unprecedented storm surge, and non-negligible flood damage, and it is anticipated that Ian will be one of the costliest U.S. hurricanes on record.

The global natural catastrophes of 2017–21 caused US$1.2 trillion in economic losses and close to US$500 billion in insured losses; 2022 added around US$120 billion in insured losses according to Munich Re.

These unprecedented losses have occurred year after year over the last six years, averaging at more than US$100 billion per annum, and pose significant challenges to the understanding, managing, and pricing of future weather-related risks.

Moody’s RMS recently published its comprehensive 2022 Catastrophe Review report, which is available to clients on the Support Center, and the Moody’s RMS 2022 Catastrophe Review: Executive Summary, which is now available for download.

Hurricane Ian: Florida’s Game-Changer

With 14 named storms, eight hurricanes, and two major hurricanes, the 2022 North Atlantic hurricane season concluded as a climatologically average season. But the year will be best remembered for the impact of Hurricane Ian which made landfall in Florida on September 28, 2022.

Ian caused catastrophic wind and storm surge damage in southwestern and central Florida and the Carolinas. Landfalling in a precarious Florida insurance market amid rising inflation, Hurricane Ian will have lasting effects on Florida and the insurance industry.

Moody’s RMS estimates insured losses in the U.S. from Hurricane Ian to be between US$53 and US$74 billion, with a best estimate of US$67 billion.

Australia’s Costliest Catastrophe

February and March 2022 brought unprecedented rainfall and flooding across the Australian states of New South Wales and Queensland, resulting in the costliest insured natural disaster in the country’s history, surpassing the 1999 Eastern Sydney Hailstorm event.

Windstorm Trio: A Reminder of Windstorm Risk in Europe

In February 2022, a series of damaging windstorms swept across parts of northwestern Europe within the space of a week. Between February 16–22, Dudley, Eunice, and Franklin caused widespread damage and major disruption across northern Germany, the Netherlands, and the U.K., as well as affecting Austria, Belgium, the Czech Republic, Denmark, France, Ireland, Poland, Slovakia, and Switzerland.

Windstorms Dudley and Eunice represent the most significant European windstorm loss since Windstorm Kyrill in January 2007. Moody’s RMS estimates that the total insured losses from Dudley and Eunice will likely fall in the range of US$3.4 to US$5.1 billion (€3.0 to €4.5 billion).

Year of the European Hailstorm

2022 will also be remembered as the 'Year of the Hailstorm' in Europe, particularly in France. The unprecedented hail occurrences created larger-than-expected losses and payouts across many European countries, upending the current understanding of severe convective storm average annual losses in Europe.

According to initial press releases from France Assureurs (FA), the French insurers association, insurers received nearly 960,000 claims totaling US$3.85 billion (€3.9 billion) from the three main periods of damaging thunderstorm activity.

Active but Less Damaging Wildfire Season

The wildfire season across the U.S. in 2022 was not nearly as destructive or damaging as in recent years, despite an above-average number of fires and total area burned.

However, Colorado and New Mexico recorded their largest and most destructive wildfires (Marshall Fire and Hermit’s Peak/Calf Canyon Fire, respectively), and while California saw notable fires including the Oak, McKinney and Mill, and Mosquito Fires, the events were not nearly as damaging as those in 2020 and 2021.

COVID-19 Pandemic

For a third year, the COVID-19 pandemic continued as a far-reaching global event. As measures to mitigate the virus waned as the world benefited from effective vaccines and treatments, further insight was gained into the prevalence of Long COVID and the possible long-term health and disability impacts.

Moody’s RMS Event Response Service

In summary, 2022 will go down in history as another challenging year for the insurance industry, and another in a stretch of years dating back to 2017 that have brought game-changing events that altered our understanding of natural catastrophe risk.

As a result, Moody’s RMS approach to event response continues to evolve. Striking a balance between timeliness and accuracy remains critical to ensure that we deliver the most credible analysis to our clients while increasing efficiency and continuing to reduce delivery timelines.

In 2022, the Moody’s RMS Event Response team continued to dynamically support the year’s events as they unfolded, to provide more frequent layers for use on the Moody's RMS ExposureIQ™ application on the Moody’s RMS Intelligent Risk Platform™ – and with more to come in 2023.

Please download the recently published Moody’s RMS 2022 Catastrophe Review: Executive Summary, which provides context and analysis of the year’s most notable industry events and key insights we can carry into the years ahead.

Moody’s RMS clients should visit the Support Center for the full-length edition of the report.