Insurance, natural catastrophes cost 108 billion in damages

For insurance companies alone, the sting of floods, earthquakes and other natural disasters weighs $108 billion. Natural disasters in 2023 caused $280 billion in damage, of which $108 billion was covered by insurance companies. The two figures are significantly higher than the 10-year average, which is 223 and 89 million respectively, according to information released by the Swiss reinsurance company Swiss Re in its traditional Sigma study.

The devastating earthquake in Turkey and Syria, storms and large-scale urban flooding were the main events that confirmed the 5-7% annual growth trend in insured damage from natural catastrophes globally since 1994, the statement said. If man-made disasters are added to natural disasters, the total comes to 291 billion (compared to 295 in 2022, but 235 in the average of the last ten years), of which 117 billion (compared to 141 and 91 respectively) are insured. "Even in the absence of a historic storm such as Hurricane Ian, which had hit Florida the previous year, global losses from natural catastrophes in 2023 were severe," Jean Haegeli, Swiss Re's chief economist, quoted in the note. "This confirms the 30-year damage trend, which has been driven by the accumulation of assets in regions vulnerable to disasters."

"In the future, however, we must consider one more factor: the intensification of climate-related risks," the specialist continues. "More violent storms and more extensive flooding, fuelled by global warming, will contribute more to the damage. This shows how urgent it is to take action, especially given the structurally higher inflation that has driven up post-disaster costs'. Moreover, the entire global picture is changing. "As weather events intensify due to climate change, risk assessment and insurance premiums need to keep pace with a rapidly changing landscape," explains Moses Ojeisekhoba, a Swiss Re executive, also quoted in the release. 'Looking forward, we need to focus on reducing loss potential. 2023 was the hottest year on record and the beginning of 2024 is following suit. Keeping insurance sustainable and affordable requires a concerted effort by private industry, the public sector and society at large, not only to mitigate climate risks, but also to adapt to a world of more intense weather phenomena," the expert concludes.