South Africa is no longer considered a low catastrophe risk country. According to Global risk consulting Aon latest weather, climate and catastrophe report which evaluates the impact of the natural disaster events worldwide in 2017, 330 natural catastrophe events occurred and generated economic losses of $353 billion.
97% of these ($353 billion) were due to weather related events including Hurricanes Harvey, Irma and Maria in the USA. Typhoon Hato in China and Cyclone Debbie in Australia.
The combined catastrophe insured losses for South Africa in 2017 was the highest ever recorded driven by the Knysna fires and flooding in Durban. Insurance released more than R5 billion towards affected parties. Reinsurers do not regard South Africa as a low catastrophe risk region anymore, with the country having experienced a high frequency of large loss events in the last five years. This is now regarded as the new normal and has resulted in adjustments and steep price increases by reinsurers. Insurers are retaining more risk than ever before, which is driving a need for greater understanding of these risks.