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25 Mar, 2023 13:16

Economic cost of natural disasters estimated

Worldwide losses topped $275 billion last year, according to a new insurance analysis
Economic cost of natural disasters estimated

Natural disasters resulted in global economic losses of $275 billion last year, of which $125 billion was covered by insurance, according to an annual report by the Swiss Re Institute.

The publication, which was issued on Wednesday, showed that 2022 was the second consecutive year in which insured losses from natural catastrophes exceeded the $100 billion mark. The staggering number was due to Hurricane Ian in Florida, hail storms in France, floods in Australia and South Africa, winter storms in Europe and the US, as well as droughts in Europe, China and the Americas, the insurance company reports.

“The magnitude of losses in 2022 is not a story of exceptional natural hazards, but rather a picture of growing property exposure, accentuated by exceptional inflation,” said Martin Bertogg, the head of Catastrophe Perils at Swiss Re. “While inflation may subside, increasing value concentration in areas vulnerable to natural catastrophes remains a key driver for increasing losses,” he added.

According to the report, 2022 insured losses were largely driven by Hurricane Ian, which was by far the year’s costliest event. Making landfall in Florida in September as a category 4 storm, Ian reportedly resulted in estimated insured losses of $50–65 billion.

At the same time, a cluster of storms (Eunice, Dudley, Franklin) in northwestern Europe in February 2022 led to combined insured losses of over $4 billion, bringing the total for the category to almost double the previous 10-year average. Meanwhile, France saw the highest ever annual loss of $5 billion from hailstorms, according to the report.

The insurer also highlighted that global losses from floods were above average. The flooding in eastern Australia in February-March 2022 reportedly resulted in insured losses of $4.3 billion.

Swiss Re pointed out that there has been a 5–7% average annual increase in insured losses from natural catastrophes over the past three decades.

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