Munich Re says total losses from natural catastrophes amounted to US$160 billion in 2018, above the inflation-adjusted average for the past 30 years.
The figure for Africa was US$1.4 billion – but almost none of these losses were insured.
The most severe events were a drought in South Africa from January to May, with total losses of around US$500 million, and flooding caused by heavy rainfall in Kenya between March and May (overall losses of around US$350 million) and in Nigeria in September (overall losses in the region of US$280 million).
From 1980 to 2018, natcats in Africa produced overall losses (adjusted for inflation) of US$54 billion, of which just US$2.7 billion were insured.
Although South Africa experienced just US$12 billion of the continent’s overall losses, the country accounted for the lion’s share of the insured losses (US$1.8 billion). The natural disasters with the greatest humanitarian impact in Africa are famines which, although generally caused by drought, are heavily influenced by anthropogenic factors such as a lack of facilities for those in authoritarian states and regions affected by civil war.
“With the exception of South Africa, this continent has one of the world’s lowest levels of insurance penetration; this while studies have shown that countries in which insurance solutions are an accepted instrument to better overcome economic shocks recover more quickly following severe catastrophes,” said Nico Conradie, CEO of Munich Re. “That is why we are systematically working to offer effective and low-cost solutions on the basis of parametric weather triggers, for example, that facilitate rapid pay-out once a specific threshold is passed, say for precipitation or storms. Many African countries are growing rapidly, but a disaster can ruin the livelihoods of many people. Thanks to simple financial instruments to reduce economic vulnerability, they can quickly return to normal following a disaster – at least financially.”