Insurance industry faces limited payouts amidst 2024 economic losses

Storm frequency resulted in approximately 1,200 fatalities.

Despite economic losses exceeding $20b, insured losses from severe weather catastrophes were significantly lower in 2024, estimated at $2b to $3b, reported WTW. 

The 2024 Western North Pacific typhoon season recorded 23 named storms, 15 typhoons, and nine intense typhoons, slightly below the 1991–2020 average. 

However, the insurance implications were shaped more by the severity and landfall patterns than by storm frequency.

This reflects a persistent protection gap in the region, where many affected areas have low insurance penetration. 

The season resulted in approximately 1,200 fatalities, primarily attributed to Typhoon Yagi, making it the deadliest season since 2013.

Typhoon Yagi alone accounted for over $15b in economic losses, whilst insured losses were limited to about $1b. 

The low insurance coverage in South China and Vietnam contributed to the disparity. 

Yagi reached wind speeds of up to 160 mph, with sustained winds over 150 mph at landfall, marking it the strongest recorded typhoon to hit Vietnam and one of the most intense to impact Hainan province.

Typhoon Shanshan, which made landfall in Japan, caused insured losses of less than $1b despite Category 4-equivalent intensity and rainfall exceeding 800mm in some areas.

The relatively low exposure in affected zones mitigated insurance payouts. In comparison, Typhoon Jebi in 2018 resulted in up to $14b in insurance claims due to its path over heavily insured urban centres.

The Philippines experienced an unusual clustering of six storms within 30 days, impacting over 13 million people and causing $500m in economic damage. 

The clustering led to repeated damage in Luzon and overwhelmed local emergency infrastructure, but again, low insurance uptake resulted in minimal claims activity despite widespread destruction.

Whilst insured losses remained limited relative to total damages, the increasing scale and frequency of extreme weather events are expected to influence future underwriting, risk modelling, and reinsurance pricing in the region, warned WTW.