Top 10 Largest Insurance Payouts
In this article, we will explore the top 10 largest insurance payouts of all time, taking a closer look at their context and subsequent impact. The insurance industry has experienced some of the most severe financial shocks in history, especially in the wake of unprecedented natural disasters and catastrophic events. From hurricanes and earthquakes to unprecedented storms, these events have resulted in large insurance payouts that not only reflect the damage they have caused, but also highlight the evolution of risk management and insurance coverage.
As climate change continues to impact weather patterns and increase the frequency of extreme events, understanding these large insurance payouts can provide valuable insight into the challenges and opportunities facing the industry. In this article, we will explore the top 10 largest insurance payouts of all time, highlighting the brokerage firms most affected and the lessons learned from each event.
Note: This list only includes traditional insurance payouts and does not include government-backed bailouts. While the US government’s $81 billion bailout of American International Group (AIG) during the 2008 financial crisis was not an insurance payout in the traditional sense, it was a large insurance payout. For ease of understanding, this article only counts insurance claims and payouts. Let’s get started!
10. Storm Kirill
- Year: 2007
- Total Claims: $10 billion
- Insurer most affected: Munich Re, with claims totaling nearly $1.5 billion.
Storm Kirill swept across Europe in early 2007, causing widespread devastation to ecosystems and human settlements. In January 2007, Storm Kirill swept across northern Europe, causing extensive damage to Germany, the United Kingdom, the Netherlands, and several other countries. The extratropical cyclone brought strong winds, causing widespread property damage, infrastructure damage, and a large number of fatalities. Losses to the insurance industry were approximately $10 billion, making it one of the costliest storms in Europe’s history.
9. Thailand Floods
- Year: 2011
- Total Claims: $12 billion
- Broker most affected: Thai Re Public Company Limited
In 2011, 65 of Thailand’s 76 provinces were declared “flood disaster areas.” Intense monsoon rains caused widespread flooding in Thailand, affecting millions of people and disrupting global supply chains. Insurance claims covered property damage, business interruption and industrial losses. The event highlighted the interconnectedness of global risks and the importance of supply chain insurance.
8. Hurricane Maria
- Year: 2017
- Claims: $18 billion
- Most affected broker: Triple-S Management, Puerto Rico’s largest insurance company
Hurricane Maria devastated Puerto Rico and many other islands in the Caribbean. The Category 5 hurricane devastated Puerto Rico and other Caribbean islands. Insurance claims covered extensive property damage, business interruption, and infrastructure losses. The impact of Hurricane Maria underscores the challenges of insuring against extreme weather in vulnerable areas.
7. Hurricane Harvey
- Year: 2017
- Claims: $19 billion
- Most affected insurance broker: State Farm Insurance, with an estimated $1.9 billion in claims
In 2017, Hurricane Harvey made landfall in the United States, causing the most significant damage in Texas. The Category 4 hurricane caused catastrophic flooding in Texas, especially in the Houston metropolitan area. The huge claims covered flood damage to homes and businesses, as well as vehicle losses. Harvey emphasized the need to enhance flood insurance coverage in high-risk areas.
6. Deepwater Horizon Oil Spill
- Year: 2010
- Total Payout: $20.8 billion
- Most Affected Insurer: Lloyd’s of London, with claims of approximately $1.3 billion
The largest offshore oil spill in history resulted in huge insurance payouts. The claims covered environmental damage, business interruption, and cleanup costs. The event reshaped marine and energy insurance, highlighting the importance of robust environmental liability insurance.
5. California Wildfires
- Year: 2017-2018
- Total Payout: $24 billion
- Most Affected Insurer: State Farm, with claims of $1.9 billion for the 2018 Camp Fire alone.
Wildfires are occurring at an unprecedented rate due to climate change | Copyright: Getty
A series of devastating wildfires in California resulted in huge insurance payouts over a two-year period. The claims covered property damage, business interruption, and evacuation costs. These events prompted a reassessment of wildfire risk and insurance rates in fire-prone areas.
4. Hurricane Sandy
- Year: 2012
- Total compensation: $36 billion
- Most affected broker: American International Group (AIG), which faces claims of approximately $2 billion.
Hurricane Sandy made landfall near New Jersey and New York City, one of the most densely populated areas in the United States.
Also known as Superstorm Sandy, the hurricane caused catastrophic damage to the East Coast of the United States. Insurance claims covered extensive property damage, business interruption, and flooding losses in multiple states.
3. Tohoku Earthquake and Tsunami
- Year: 2011
- Total compensation: $35 billion
- Most affected broker is Tokio Marine Holdings, which faces claims of approximately $2.4 billion.
The 2011 earthquake in Japan triggered a tsunami, which in turn led to the Fukushima nuclear accident, one of the worst nuclear disasters in world history. Image source: Japan Atomic Energy Agency Image Library
On March 11, 2011, Japan experienced one of the worst natural disasters in history: a magnitude 9.0 earthquake, followed by a powerful tsunami that devastated coastal areas. The disaster caused a massive loss of life of more than 18,000 people, as well as extensive damage to infrastructure and housing.
Total insurance claims were approximately $35 billion, covering property damage, business interruption, and losses associated with the tsunami-induced nuclear disaster in Fukushima. The event highlighted the importance of effective disaster preparedness and risk mitigation strategies in the insurance industry. It also sparked a global debate on nuclear safety and disaster response frameworks in seismically active regions.
2. 9/11 Terrorist Attacks
- Year: 2001
- Total Claims: $40 billion
- Insurer Worst Affected: Swiss Re, with claims of nearly $2 billion
The World Trade Center site after the 9/11 terrorist attacks | Source: slagheap via Openverse
The 9/11 terrorist attacks were a tragic turning point in history that had a profound impact on the insurance industry. On that fateful day in 2001, terrorists hijacked civilian airliners in a coordinated attack that killed nearly 3,000 people.
Insurance payouts totaled approximately $40 billion, covering severe property damage, business interruption losses, and life insurance claims for victims’ families. This unprecedented event altered the way insurers assess terrorism-related risks, prompting the development of new insurance policies to address these threats. Insurance premiums across the industry increased significantly, and insurance terms changed in the aftermath of the hurricane.
1. Hurricane Katrina
- Year: 2005
- Total payouts: $41 billion
- Insurance company most affected: State Farm Insurance, which paid out more than $3.8 billion.
In 2007, Hurricane Katrina devastated towns along the Gulf of Mexico. Hurricane Katrina, which struck the United States in August 2005, remains the costliest natural disaster in U.S. history. The Category 5 hurricane devastated the Gulf Coast, especially New Orleans, causing levee collapses and massive flooding.
The storm caused widespread destruction, displaced hundreds of thousands of people, and killed nearly 1,800 people. Insurers faced a staggering number of claims for property damage, business interruption, and casualties, with the final payout amount exceeding $41 billion.
The disaster not only highlighted the vulnerability of urban infrastructure but also prompted major changes in insurance practices and disaster preparedness measures nationwide.
