Insurers and government-sponsored programmes globally faced total payout claims of $134 billion last year, only marginally below the record $137 billion of 2011.

The biggest factor in those costs were weather related disasters, including hurricanes Harvey, Irma and Maria.

According to a report by Aon Benfield, 2017 was the costliest year on record for weather disasters, with the global economic impact estimated at $344 billion. A further $9 billion of economic losses were attributed to other natural disasters.

Globally reinsurers had $600 billion of capital available to pay claims at the end of the third quarter of 2017.

Impact Forecasting, Aon Benfield’s catastrophe model development team, released its Weather, Climate & Catastrophe Insight: 2017 Annual Report, which evaluates the impact of the natural disaster events that occurred worldwide.

The report revealed that there were 330 natural catastrophe events in 2017. The weather-related events, included Hurricanes the aforementioned hurricanes in the US and Caribbean, together with Typhoon Hato in China and Cyclone Debbie in Australia.

Last year’s natural catastrophe losses were 93 per cent higher than the 2000-2016 average. There were 31 separate billion-dollar events, with 16 of those occurring in the US.

Insured losses were 139 per cent higher than the $56 billion of 2016, primarily due to high insurance penetration in the US that suffered a very active Atlantic hurricane season, other severe weather events and wildfires.

“While 2017 was an expensive year for the insurance industry, the reinsurance market had an estimated $600 billion in available capital to withstand the high volume of payouts,” said Eric Andersen, chief executive officer of Aon Benfield.

“Most critically, the US weather and wildfire events in particular have demonstrated the value of reinsurance, with claims being paid in an average of eight days to augment the recovery process.”

The report found that hurricanes Harvey, Irma and Maria caused $230 billion of economic damage, of which $80 billion was insured losses. Wildfires resulted in insurance losses of $14 billion, the highest on record for that peril. And a total of 10,000 people died as a result of natural disasters.

The report also noted that 2017 was the third warmest year for land and ocean temperatures since comparable records began in 1880.

Steve Bowen, Impact Forecasting director and meteorologist, said: “The high cost of disasters in 2017 served as a reminder that we continue to face increasing levels of risk as more people and exposures are located in areas that are particularly vulnerable to major, naturally occurring events.

“As weather scenarios grow more volatile in their size and potential impact, it becomes more imperative than ever to identify ways to increase awareness, improve communication, and lower the insurance protection gap.

“We know natural disasters are going to occur. The question is how prepared are we going to be when the next one strikes.”

Aon Benfield is the global reinsurance intermediary and capital advisor of Aon plc.

The Weather, Climate & Catastrophe Insight: 2017 Annual Report can be found at http://aon.io/ab-if-annual-report-2017