According to reinsurance giant Munich Re, natural disasters resulted in an industry loss of $140 billion in 2024, up from 2023’s $106 billion, with insured losses notably higher than the inflation-adjusted averages of the past 10 and 30 years.
The 2024 insured losses were the third most expensive year since 1980, the reinsurer said.
Moreover, total losses stemming from nat cat events, including ones not covered by insurance, sat at $320 billion in 2024, up from $268 billion in 2023.
The reinsurer noted that losses from non-peak perils such as floods, wildfires, and severe thunderstorms were once again substantial, producing total losses of $136 billion, of which around $67 billion were insured.
However, while this was slightly below figures seen from the previous year ($143 billion, of which insured losses totalled a record $82 billion), it was well above the average figures of the past ten years (inflation-adjusted $10 billion/$48 billion).
“One record-breaking high after another – the consequences are devastating. The destructive forces of climate change are becoming increasingly evident, as backed up by science. Societies need to prepare for more severe weather catastrophes. Accordingly, Munich Re is expanding and adapting its risk models to address these developments. This allows us to maintain, and even expand, our substantial risk capacity, helping to close the protection gap. At its core, insurance puts a price tag on the risks, which further encourages prevention,” commented Thomas Blunck, Member of the Board of Management, Munich Re.
Furthermore, the reinsurer highlighted how Hurricanes Helene and Milton, which struck the United States in rapid succession in September and October respectively, were pegged as the most destructive disasters of 2024.
In fact, Milton produced the highest insured losses of the year, totalling $25 billion, despite the fact that it narrowly missed the Tampa metropolitan area when it made landfall in early October.
Milton also drove a storm surge into southwest Florida, which went on to cause a significant amount of wind damage across the state, which ultimately led to a total loss of $38 billion.
Additionally, the third costliest natural disaster of 2024 in terms of overall losses was the earthquake that struck Japan on New Year’s Day, which shook the country’s west coast near the sparsely populated Noto Peninsula with a magnitude of 7.5.
The earthquake collapsed many buildings and thousands of people were left without electricity and water for weeks. Overall losses were estimated at $15 billion with insured losses totalling around $2.5 billion.
From a geographical perspective, North America (including Central America and the Caribbean) once again reported the highest share of global natural catastrophe losses, and a higher proportion than usual (about 60% of total losses, 10-year average 54%). In total, losses amounted to around $190 billion in 2024, of which around $108 billion were insured.
As for Europe, Munich Re noted that natural disasters destroyed assets worth $31 billion in 2024, of which $14 billion were insured, with the most serious nat cat event being the extreme flooding in Spain near the provincial capital of Valencia, that took place in late October.
“Hardly any other year has made the consequences of global warming so clear: with annual average temperatures reaching around 1.5°C above pre-industrial levels for the first time, 2024 will surpass the previous record from 2023. This makes the past eleven years the warmest since the beginning of systematic record-keeping,” Munich Re said.
“The impact of man-made climate change on weather disasters has been proven many times over by research: in many regions, severe thunderstorms and heavy rainfall are becoming more frequent and more extreme. Although tropical cyclones are not generally increasing in number, the proportion of extreme cyclones is growing. They, in turn, are rapidly intensifying and bringing extreme precipitation with them.”
“The physics are clear: the higher the temperature, the more water vapour and therefore energy is released into the atmosphere. Our planet’s weather machine is shifting to a higher gear. Everyone pays the price for worsening weather extremes, but especially the people in countries with little insurance protection or publicly funded support to help with recovery. The global community must finally take action and find ways to strengthen the resilience of all countries, and especially those that are the most vulnerable,” added Chief Climate Scientist Tobias Grimm.
The post 2024 insured nat cat loss bill pegged at $140bn: Munich Re appeared first on ReinsuranceNe.ws.
