In which countries did we see the largest increase in compensation in 2017?

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There are several factors that can lead to an increase in insurance claims. The first is perhaps just growth on a marketplace. If the number of active policies in a country or a specific insurance sector increases, the number of claims will probably increase in correlation. A second important factor is natural disasters. In 2017, a series of major disasters in several countries resulted in a huge increase in gross claims and the largest ever recorded level of insured losses due to natural disasters and man-made disasters.

According to the Global Insurance Market Trends of the OECD, the country that saw the largest increase in indemnities in non-life insurance in 2017 was Peru. The South American country experienced an 85.7% increase after having suffered the worst flooding in decades, causing rivers to flood and mudflows to destroy infrastructure and homes. The floods caused estimated losses of $ 3.1 billion, of which $ 380 million was insured.

Interestingly, the country recorded the largest drop (-27.2%) of non-life insurance indemnities in 2017 in Bolivia, close to Peru in West-Central-South America. Being neighbors does not necessarily correlate with comparable gross benefits.

The OECD Global Insurance Market Trends report shows that the trends in indemnities for non-life insurance policies vary widely between the different countries and varied greatly. Gross payments increased in 33 reporting countries in 2017 and decreased in 12.

The annual real growth rates of gross non-life insurance claims in the non-life insurance sector in the selected countries of 2017 are shown below. The growth percentages take into account the variations in outstanding claim provisions (where possible). All statistics are from OECD Global Insurance Statistics.

1. Peru 85.7%

2. Honduras 36.2%

3. New Zealand 34.8%

4. Lithuania 29.8%

5. Nicaragua 24.3%

6. Portugal 13.0%

7. Poland 12.7%

8. Hungary 11.7%

9. Israel 10.8%

10. Slovenia 10.5%

11. Luxembourg 8.1%

12. Latvia 7.9%

13. Sweden 7.6%

14. Spain 7.0%

15. Germany 6.8%

16. Turkey 6.7%

17. Mexico 6.4%

18. Australia 5.9%

19. Austria 4.6%

20. Estonia 4.0%

21. Indonesia 3.7%

22. Hong Kong 3.2%

23. Iceland 3.2%

24. Greece 3.0%

25. United States 2.8%

26. France 2.8%

27. Switzerland 2.6%

28. Guatemala 1.9%

29. Italy 1.7%

30. United Kingdom 1.4%

31. Denmark 0.6%

32. The Netherlands 0.5%

33. Czech Republic 0.4%

34. Chile -0.7%

35. Norway -2.4%

36. Russia -2.7%

37. Malaysia -3.0%

38. Finland -3.7%

39. Belgium -6.8%

40. Costa Rica -6.8%

41. Brazil -8.3%

42. Japan -8.4%

43. Colombia -9.4%

44. Singapore -13.6%

45. Bolivia -27.2%

According to the global reinsurance company Swiss Re, 2017 saw the largest ever recorded level of insured losses due to natural and man-made disasters. Some of the biggest disasters in the world include: Cyclone Debbie in Australia (estimated losses of $ 2.7 billion, of which approximately $ 1.4 billion was insured); wildfires in the US (estimated losses of $ 13 billion, of which about $ 9.8 billion was insured); the earthquake in Mexico (estimates a loss of $ 6 billion, of which about $ 2 billion was insured); and multiple flooding and landslides in China and South Asia with less significant insured losses.

It is also impossible to forget the devastating Atlantic hurricane season in 2017, that Hurricane Irma (estimated losses of $ 57 billion, of which about $ 32 billion was insured), Hurricane Harvey (estimated losses of $ 95 billion, of which about $ 30 billion was insured) and Hurricane Maria (estimated losses of $ 68 billion, of which about $ 30 billion was insured) leave trails of devastation behind in their wake. All these events have obviously led to increases in gross benefit payments.

Countries that experienced a fall in gross benefit payments were generally less affected by natural disasters in 2017, the report continues. It also highlights Japan, which saw a decrease of -8.4% in 2017, which was in fact the result of paying a wave of claims in 2016 after the earthquake in Kumamoto.