Munich Re estimates $34b of insured cat losses
Munich Re estimates that global insured losses from natural catastrophe events reached $34 billion in the first-half of 2022, with slightly more than half of these insured. It calculates that economic losses from natural disasters totalled $65 billion, which is down from the $105 billion seen in the same period of 2021.
Extreme multi-day rainfall and severe flooding in Australia constituted the main loss burden for the insurance industry of at least $3.7 billion, but the US once again country with highest weather-related losses.
Floods, earthquakes and storms caused overall losses of some $65 billion compared with $105 billion in the loss-heavy previous year. At around $34 billion, insured losses were roughly in line with previous years.
In Europe, extreme heat and arid conditions in early summer led to water scarcity and wildfires, especially in Italy, Spain and Portugal. Munich Re said it is often difficult to put an exact figure on losses from heat and drought as their effects, such as production losses in industry due to a lack of cooling water, take a while to emerge.
Extreme heat, drought and wildfires are increasing in many regions of the world, Munich Re stressed, and the scientific community believes climate change is having a significant effect on the frequency of such events.
“The natural disaster picture for the first-half of 2022 is dominated by weather-related catastrophes,” said Torsten Jeworrek, a member of Munich Re’s board of management and its chief executive officer for reinsurance.
“Extreme tornadoes in the US caused billions in damage, parts of eastern coastal Australia were submerged by floods, and southern Europe struggled with extreme heat, wildfires and drought.”
The Intergovernmental Panel on Climate Change recently warned of the need for insurers to adapt their loss models to adequately assess the changing risk, noted Jeworrek.
“Loss prevention is a fundamental component in mitigating the economic effects of climate change. It is therefore extremely worrying that insurance penetration in developing and emerging nations is stagnating at well below 10%, and that even in industrial countries there is much room for improvement,” he said.
