Weather-related incidents are on track to surpass $100bn (€92bn) for the third consecutive year, as floods, hail, and wildfires linked to climate change become more frequent. According to a report by Bloomberg Intelligence, Munich Re estimates the global insured costs of natural catastrophe events in the first half of 2023 at $43bn, while Swiss Re puts it at $50bn.
More than two-thirds of the insured losses were caused by severe thunderstorms in the US. Despite this, the $12-figure threshold is expected to be exceeded, even though only $5bn of the $40bn in damages caused by the year’s most devastating event, the earthquake in Turkey and Syria, were insured. The full US hurricane season, which extends until the end of November, has yet to conclude. Swiss Re also noted that it has already experienced some limited insured losses related to summer heatwaves in Europe and the US, which will be reflected in the second-half results.
In 2022, natural catastrophe insured losses amounted to $125bn, compared to an average cost of $81bn over the past decade and $110bn over the last five years. While the rise in claims may seem concerning, it does not necessarily spell bad news for insurers. Swiss Re’s first-half net income increased as it managed to contain its losses from natural catastrophes. Additionally, demand for coverage rose due to past disasters, resulting in higher policy prices.