Catastrophe loss refers to significant financial losses incurred as a result of natural disasters or large-scale events such as hurricanes, earthquakes, floods, wildfires, or terrorist attacks. These events cause extensive damage to property, infrastructure, and lives, resulting in substantial economic costs for individuals, businesses, insurers, and governments. Catastrophe losses can have wide-ranging impacts on communities and economies, requiring substantial resources for recovery and reconstruction efforts. Insurance companies often manage catastrophe losses through specialised catastrophe risk modelling, reinsurance, and disaster response strategies to mitigate their financial exposure and assist policyholders in recovering from these devastating events.
A difficult-to-predict, severe loss that is best covered by an insurance company.
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This glossary post was last updated: 29th March, 2024.
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