Weather, Climate & Catastrophe Insight

1 2017 Annual ReportAon BenfieldWeather, Climate & Catastrophe InsightWeather, Climate & Catastrophe Insight 2017 Annual ReportExecutive Summary: 2017 s Natural Disaster Events ..12017 Natural Disaster Events & Loss Trends ..2 Global Economic Losses ..2 Global Insured Losses ..6 Global Fatalities ..11 Natural Disasters Defined & Total Events ..122017 Natural Peril Review ..13 Tropical Cyclone ..13 Severe weather ..18 Wildfire ..20 Earthquake ..22 Other Perils ..232017 Climate Review ..24 Global Temperature, ENSO ..25 Global Carbon Dioxide ..26 Arctic Sea Ice ..272017 Global Catastrophe Review ..30 United States ..30 Americas (Non-U .S .) ..35 EMEA (Europe, Middle East, and Africa) ..41 APAC (Asia and Oceania) ..47 About Impact Forecasting ..52 About Aon Benfield ..52 Contacts ..53 Table of Contents1 Aon BenfieldExecutive Summary2017: Costliest year on record for weather disastersInsurance industry in position to handle high volume of claims payoutsAlong with this report, we continue to welcome users to access current and historical natural Catastrophe data and event analysis on Impact Forecasting s Catastrophe Insight website: cost of natural disasters in 2017; second-costliest year on recordInsured cost of natural disasters in 2017; second-costliest year on recordCostliest year ever recorded for weather disastersCostliest year for insurers for weather disastersPercentage of how much higher2017 economic lossesvs.

2 2000-2016 averagePercentage of how much higher2017 insured lossesvs. 2000-2016 averageUSD 353 billionUSD 134 billionUSD 132 billionUSD 344 billion+93%+163%USD 600 billionAmount of available capital by global reinsurers at the end of Q3 2017; industry well suited to handle the volume of claims payouts in eventsThird warmest yearon record dating to 1880 for combined land and ocean temperatures1 , 141+Highest casualty disaster of 2017(Mudslide in Sierra Leone)USD 80 billionInsured cost of hurricanes Harvey, Irma, and Maria31 14 USD 220 billionEconomic cost of hurricanes Harvey, Irma, and MariaUSD 24 billionSecond-costliest year on record for insurers with the severe weather perilUSD 14 billionCostliest year on record for insurers with the wildfire peril 62%Percentage of 2017 global economic damage from Harvey, Irma, and Maria 51%of Catastrophe losses occured in the continental United States 63%of insured Catastrophe losses occurred in the continental United States 60%Percentage of 2017 global insurance payouts from Harvey, Irma, and Mariabillion-dollar events16 in the United Statesbillion-dollar insured events11 in the United States2 weather , Climate & Catastrophe Insight 2017 Annual ReportGlobal Economic LossesExhibit 1: Top 10 Global Economic Loss EventsDate (s)EventLocationDeathsEconomic Loss (USD)Insured Loss (USD)Aug.

3 25 Sept . 2 Hurricane HarveyUnited States90~100 billion~30 billionSeptember 18-22 Hurricane MariaCaribbean IslandsHundreds+~65 billion~27 billionSeptember 4-12 Hurricane IrmaU .S ., Caribbean Islands13 4~55 billion~23 billionOctoberWildfiresUnited States4313 billion11 billionSummerFloodingChina1167 .5 billion300 millionSummer & AutumnDroughtSouthern EuropeN/A6 .6 billion700 millionSeptember 19 EarthquakeMexico3704 .5 billion1 billionJulyFloodingChina374 .5 billion125 millionAugust 23-25 Typhoon HatoChina223 .5 billion250 millionM a y 8 -11 Severe WeatherUnited States03 .4 billion2 .6 billionAll Other Events90 billion38 billionTotals353 billion1134 billion1,2 Exhibit 2: Significant 2017 Economic Loss Events3> 1,000 MHurricane Harvey100 billionCalifornia Wildfires13 billionHurricane Irma55 billionHurricane Maria65 billion2017 Natural Disaster Events & Loss Trends1 Subject to change as loss estimates are further developed2 Includes losses sustained by private insurers and government-sponsored programs3 Based on events that incurred economic loss greater than USD250 million.

4 Position of an event is determined by the most affected administrative unit or epicenter> 1,000 MHurricane Harvey100 billionCalifornia Wildfires13 billionHurricane Irma55 billionHurricane Maria65 billion3 Aon BenfieldEconomic losses arising from natural disasters in 2017 were among the highest ever recorded on a nominal, inflation-adjusted, and normalized basis4 . The USD353 billion total was just the second year on record to ever surpass USD300 billion on an inflation-adjusted basis, joining 2011 with losses of USD486 billion . In terms of economic losses resulting solely from weather disasters, 2017 became the costliest year ever recorded at USD344billion . This was higher than the USD294 billion incurred in 2005 .The predominant driver of damage in 2017 resulted from one of the costliest Atlantic hurricane seasons on record following the landfalls of Hurricanes Harvey, Irma, and Maria that left extensive damage across parts of the United States and the Caribbean Islands.

5 Those three storms alone caused an estimated USD220 billion in damage and represented 62 percent of 2017 s annual economic loss .Other significant events during the year included the most destructive wildfire outbreak ever recorded in the state of California in the United States . The October outbreak caused nearly USD13 billion in economic damage across Northern California s Napa Valley region and was followed by another billion-dollar wildfire outbreak in Southern California in December . Elsewhere, substantial summer flooding caused more than USD12 billion in damage across China, the majority of which occurred throughout the Yangtze River basin . Southern Europe endured an extended drought during the summer and autumn months that caused USD6 .6 billion in damage across parts of Spain, Italy, and Portugal . In Mexico, two powerful earthquakes struck during September that led to nearly USD6 billion in combined economic loss . This included major damage across the Mexico City metro region on the 32nd anniversary of its historic 1985 tremor.

6 Total economic losses were 93 percent above the 2000 to 2016 average of USD183 billion on an inflation-adjusted basis . Damage losses were an even more significant 156 percent higher than the median of USD138 billion . Economic losses from all natural disasters have annually trended upward by 4 .0 percent above inflation since 1980 and an even more robust 5 .9 percent since 2000 . weather -only damage has annually trended upward by 4 .2 percent above the rate of inflation since 1980 and upward by 5 .4 percent since 2000 .4 Nominal: Damage cost at the time of occurrence Inflation-Adjusted: Nominal loss adjusted to today's dollars using the Consumer Price Index Normalized: Hypothetical damage cost if a historical event occurred today with current wealth, population and exposureExhibit 3: Global Economic LossesUSD Billions (2017)8668109111193301781052629527148622 5212138132234353201020122014200820062000 2002200420160100200300400500 USD Billions (2017)8558106981382947496165852062302041 9213212216234420102012201420082006200020 02200420160100200300400500 Source: Aon BenfieldSource: Aon BenfieldAll natural disastersWeather only4 weather , Climate & Catastrophe Insight 2017 Annual ReportFor the first time since 2012, the tropical cyclone peril was the costliest of the year at USD232 billion.

7 It represented 66 percent of the global tally and was led by landfalling hurricanes in the Atlantic Ocean Basin . Other perils that registered aggregated damage costs in excess of USD25 billion were severe weather (USD36 billion) and flooding (USD30 billion) . It's worth noting that the severe weather peril had its costliest year since 2011, flooding had its lowest year since 2009, and the wildfire peril had its costliest year in decades .Exhibit 4: Global Economic Losses by PerilSource: Aon BenfieldThere have only been six individual quarters on record that have caused more than USD100 billion in inflation-adjusted economic damage, five of which have occurred since the turn of the 21st century . The third quarter of 2017 was the second-costliest quarter ever registered at USD261 billion due to catastrophic damage caused by a trio of major hurricanes and flooding across Asia . It was far behind first quarter 2011, which was dominated by the Tohoku Earthquake & Tsunami and other seismic and hydrologic events in Oceania.

8 Exhibit 5: Costliest Quarters by Economic Loss050100150200250 OtherEU WindstormWinter WeatherEarthquakeDroughtWildfireFlooding Severe WeatherTropical CycloneUSD Billions (2017)Average (2000-2016)Median (2000-2016)20172324728362223304430225215 141183910687442001 USD Billions (2017)307 Tohoku Earthquake & Tsunami New Zealand EarthquakeAustralia FloodingHurricane HarveyHurricane MariaHurricane IrmaHurricane KatrinaHurricane RitaHurricane DennisKobe EarthquakeWestern/Central EU FloodsCalifornia FloodsChina FloodsMississippi River Floods (US)Cyclone NargisHurricane IvanHurricane CharleyHurricane Frances261218191145108050100150200250300 350Q3 2004Q2 2008Q1 1995Q3 2005Q3 2017Q1 2011 Source: Aon Benfield5 Aon BenfieldThere were 31 individual billion-dollar natural disaster events in 2017, which is above the average of 27 individual events dating to 2000, but lower than the 36 individual events in 2016 . The United States led with 16 individual events (just behind the record 17 in 2011), while APAC was second with 8, the Americas was third with 5, and EMEA was fourth with 3.

9 In terms of weather -only billion-dollar events in 2017, there were 29 individual events, which is above the average of 25 dating back to 2000 and 2 individual events below the 31 registered in 2016 . The United States led with 16 individual events (just shy of the 17 recorded in 2011), APAC was second with 8, while the Americas and EMEA both experienced 3 .(Please note that Hurricane Irma was a billion-dollar event for the United States mainland and the Caribbean Islands. For this analysis, it was counted for both regions, but classified as a singular event for the final global tally.)Exhibit 6: Global Billion-Dollar Economic Loss Events0510152025303540455013112023202622 2322254739284327323631 United StatesAPACEMEAA mericasEvents201020122014200820062000200 2200420160510152025303540455013819201825 212121234135274125303129 United StatesAPACEMEAA mericasEvents201020122014200820062000200 220042016 Source: Aon BenfieldNote: Exhibit 6 includes events that reached the billion-dollar (USD) threshold after being adjusted for inflation based on the 2017 Consumer Price natural disastersWeather only6 weather , Climate & Catastrophe Insight 2017 Annual ReportGlobal Insured LossesExhibit 7: Top 10 Global Insured Loss Events Date (s)EventLocationDeathsEconomic Loss (USD)Insured Loss (USD)Aug.

10 25 Sept . 2 Hurricane HarveyUnited States90~100 billion~30 billionSeptember 18-22 Hurricane MariaCaribbean IslandsHundreds+~65 billion~27 billionSeptember 4-12 Hurricane IrmaU .S ., Caribbean Islands13 4~55 billion~23 billionOctoberWildfiresUnited States4313 billion11 billionM a y 8 -11 Severe WeatherUnited States03 .4 billion2 .6 billionDecemberWildfiresUnited States23 .2 billion2 .2 billionMarch 26-28 Severe WeatherUnited States02 .6 billion2 .0 billionSpring & SummerDroughtUnited States02 .5 billion1 .9 billionMarch 6-10 Severe WeatherUnited States02 .2 billion1 .6 billionJ u n e 11 Severe WeatherUnited States02 .0 billion1 .6 billionAll Other Events104 billion31 billionTotals353 billion4134 billion4,5 Exhibit 8: Significant 2017 Insured Loss Events6> 1,000 MInsured Loss100 - 1,000 MHurricane Harvey30 billionCalifornia Wildfires11 billionHurricane Irma23 billionHurricane Maria27 billion4 Subject to change as loss estimates are further developed5 Includes losses sustained by private insurers and government-sponsored programs6 Based on events that incurred insured loss greater than USD100 million.