14 March 2023Analysis

Moody’s RMS releases 2022 Catastrophe Review

Moody’s has announced the release of the RMS 2022 Catastrophe Review, which looks at the multiple, historic catastrophes around the world of that year, from Hurricane Ian to flooding in Australia, and heat waves, wildfires, and hailstorms in Europe.

Moody’s RMS said that: “The immense economic and insured losses from these events make it critically important to meet the significant challenges of understanding, managing, and pricing future weather-related risks.”

Key takeaways from the report include secondary perils – such as floods, wildfires, and severe convective storms – along with large exposure changes, social inflation, and non-modelled losses, have contributed significantly to overall economic and insured losses over the past five years.

In addition the report looked at floods, saying that over 2022 there were additional increasing trends of losses across the US, Europe, Asia, Australia, and Latin America. The previous “century return” period for floods is much shorter, mainly due to climate change, it says.

The firm added that 2022 saw the return of real-time in-person reconnaissance following the restrictions of the COVID-19 pandemic, adding that this on-the-ground approach provided valuable insights in the aftermath of Hurricane Ian, including the imaging of 430,000 buildings, during this unique and historic event.

The report also summarizes the work of Moody’s RMS during 2022, including its Hurricanes Ian and Nicole and European windstorm estimates, as well as the questions the historic Ian asks of markets for 2023 and beyond, such as:

· How will Ian ultimately affect the Florida insurance market in the long-term (Moody’s Investors Services recently looked at the challenges facing the Florida reinsurance industry in this data story)?

· In the near-term, what will be the influence of inflationary impacts (such as rising construction costs and labour shortages) on the total claims costs from Ian?