Global insured losses from natural catastrophes surged in the first half of 2021 to $42 billion, the second-highest amount since 2011.

The preliminary estimate from Zurich-based reinsurer Swiss Re attributed the high loss total to winter storms, intense heatwaves, and severe flooding across the world.

The insured loss total exceeded the previous ten-year average (2011-2020) of $33 billion. It was second only to the losses in the first half of 2011, when the Great East Japan earthquake and tsunami and the Christchurch, New Zealand earthquake pushed the six-month total to $104 billion.

A big contributor in the first half of 2021 was February’s winter storm Uri, a period of extreme cold combined with heavy snowfall and ice accumulation in the United States. The event took the lives of 164 people, 151 of those in Texas, and triggered estimated insured losses of $15 billion.

Close to 4,500 people lost their lives or went missing in first-half disaster events.

Martin Bertogg, Head of Cat Perils at Swiss Re, said: “The effects of climate change are manifesting in warmer temperatures, rising sea levels, more erratic rainfall patterns, and greater weather extremes. Taken together with rapid urban development and accumulation of wealth in disaster-prone areas, secondary perils, such as winter storms, hail, floods, or wildfires, lead to ever-higher catastrophe losses. … The insurance industry needs to upscale its risk-assessment capabilities for these lesser monitored perils to maintain and expand its contribution to financial resilience.“

Other first half weather events called out by Swiss Re included the thunderstorms, hail, and tornadoes that hit Europe in June, affecting homes and vehicles in Germany, Belgium, the Netherlands, the Czech Republic, and Switzerland; and the end-of-June extreme heat that shattered temperature records across western Canada and the northwestern United States. Coupled with severe drought conditions, it led to wildfires that spread south to California.

Swiss Re said that global economic losses from disaster events in the first half were estimated at  $77 billion, below average for the past 10 years. Of the total, $74 billion were due to natural catastrophes, while man-made disasters caused an additional $3 billion. However, Swiss Re said the second figure was smaller than usual, likely due to COVID-19 restrictions.

The second half of 2021 has already produced notable weather catastrophes. For example, July’s severe flooding in Germany and neighboring countries could lead to losses as high as $6.5 billion, estimates the German Insurance Association, and flooding in China’s Henan province has resulted in insured claims of $1.7 billion. In addition, extreme heat-fueled wildfires are plaguing Turkey, Greece, and Italy this month.

Jérôme Jean Haegeli, Swiss Re’s Group Chief Economist, said the UN’s Intergovernmental Panel on Climate Change report released this week confirms that there will be more extreme weather events in the future.

“Working with the public sector, the re/insurance industry plays a key role in helping to strengthen communities’ resilience by steering development away from high-risk areas, making adaptation investments, maintaining insurability of assets, and narrowing protection gaps,” he said.

Historically, the third quarter is the most loss-prone in terms of natural catastrophes, as September is the most active month for hurricanes.

The Swiss Re catastrophe loss estimates are for property damage and exclude COVID-19 related claims.

Photo by Ron Jenkins/Getty Images

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