Natural catastrophes cost insurers up to $185 billion
The insurance industry absorbed losses of $US105-130 billion ($150-185 billion) from natural disasters last year, according to calculations made by Aon, Swiss Re and Munich Re.
Aon has the highest loss estimate among the trio, at $US130 billion. The broker says the number for last year was well above the 21st century average of $US74 billion ($105 billion) and 18% higher than 2020.
It was also the fourth-costliest year on record for public and private insurance entities, behind 2017, 2011, and 2005, Aon says.
Swiss Re estimates extreme weather events such as storms, floods, heatwaves and hurricanes resulted in annual insured losses of $US105 billion from natural catastrophes, the fourth highest since 1970.
Overall insured losses, including man-made events, took the figure to $US112 billion ($154 billion).
Hurricane Ida and winter storm Uri, the two costliest disasters with insured losses of $US30-32 billion ($41-44 billion) and $US15 billion ($21 billion) respectively, left affected areas in the US with severe damages.
Ida caused flooding in New York while Uri brought extreme cold, heavy snowfall and ice accumulation, especially in Texas where the power grid experienced multiple failures on account of freezing conditions.
“The impact of the natural disasters we have experienced [last year] once again highlights the need for significant investment in strengthening critical infrastructure to mitigate the impact of extreme weather conditions,” Swiss Re Group Chief Economist Jerome Jean Haegeli said.
“Investments in infrastructure support sustainable growth and resilience and need to be upscaled.”
Munich Re’s estimates for insured losses from natural catastrophes are higher, at $US120 billion ($171 billion) with the US bearing an “exceptionally high proportion” of the damages, at $US85 billion ($117 billion).
The German reinsurer says alongside 2005 and 2011, last year proved to be the second-costliest on record for the insurance industry.
It ranks Ida as the most damaging natural disaster, with overall losses of $US65 billion ($89 billion), of which $US36 billion ($49 billion) is insured.
Munich Re says many of the weather catastrophes fit in with the expected consequences of climate change, making greater loss preparedness and climate protection a matter of urgency.
“Societies need to urgently adapt to increasing weather risks and make climate protection a priority,” Member of the Board of Management Torsten Jeworrek said.
“At the same time, severe volcanic eruptions and earthquakes [last year] showed that we should not overlook these categories of natural disasters either.”
