2023 global insured losses exceed $100bn for fourth consecutive year: Swiss Re

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The Swiss Re Institute has revealed that global insured losses from natural catastrophes exceeded $100 billion for the fourth consecutive year in 2023, with the earthquake in Turkey and Syria, severe convective storms (SCS) and large-scale urban floods acting as the main drivers.

swiss-re-institute-logoTotal global insured losses hit $117 billion in 2023, with natural catastrophes making up $108 billion of this figure, and man-made catastrophes the rest.

Being the most destructive natural catastrophe of the year, the earthquake in Turkey and Syria caused insured losses of $6.2 billion, according to Swiss Re.

The year was also marked by a high frequency of events, as 142 insured natural catastrophes set a new record.

Swiss Re explained that most were of medium severity, resulting in losses of $ 1–5 billion. However, there were at least 30 such events in 2023, many more than the previous ten-year average of 17. Of those 30 events, 21 were SCS, a new high, accounting for $64 billion in insured losses.

Swiss Re observed that increased exposures due to economic and population growth, urbanisation and wealth accumulation “remain the main force” behind rising SCS-related losses, with climate change effects likely to exacerbate the trend.

“Another factor is changes in exposure vulnerabilities, such as a rapid growth of solar power system installations on rooftops,” the firm said.

Swiss Re continued, “The first step to cutting losses is to reduce the loss potential through adaptation measures like enforcing building codes, building flood protection barriers, and discouraging settlement in areas prone to natural perils.

“Additionally, a collaboration with primary insurers, insurance associations and the public sector enables a data exchange which is key for shared risk mitigation.”

Total economic losses in 2023 amounted to $291 billion, of which natural catastrophes made up $280 billion.

Jérôme Jean Haegeli, Swiss Re’s Group Chief Economist, commented, “Even without a historic storm on the scale of Hurricane Ian, which hit Florida the year before, global natural catastrophe losses in 2023 were severe.

“This reconfirms the 30-year loss trend that’s been driven by the accumulation of assets in regions vulnerable to natural catastrophes. In the future, however, we must consider something more: climate-related hazard intensification.

“Fiercer storms and bigger floods fuelled by a warming planet are due to contribute more to losses. This demonstrates how urgent the need for action is, especially when taking into account structurally higher inflation that has caused post-disaster costs to soar.”

Moses Ojeisekhoba, Swiss Re’s CEO Global Clients & Solutions, added, “As weather hazards intensify due to climate change, risk assessment and insurance premiums need to keep up with the fast-evolving risk landscape.

“Looking ahead, we must focus on reducing the loss potential. 2023 was the hottest year on record, and the start of 2024 is following suit. Keeping property insurance sustainable and affordable requires a concerted effort by the private industry, the public sector and broader society – not just to mitigate climate risks, but to adapt to a world of more intense weather.”

The post 2023 global insured losses exceed $100bn for fourth consecutive year: Swiss Re appeared first on ReinsuranceNe.ws.

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