Natural disasters cost $275 billion in 2022
- March 22, 2023
- 0
Natural disasters caused a global economic loss of $275 billion (about €255 billion) in 2022, of which 45% was covered by insurance, according to a Swiss Re report
Natural disasters caused a global economic loss of $275 billion (about €255 billion) in 2022, of which 45% was covered by insurance, according to a Swiss Re report that highlights a trend of 5 to 7% insured losses. per year for the last 30 years.
This is reflected in a document published this Wednesday by the reinsurer, which highlights among the most costly events Hurricane Yan in Florida (USA), hail in France reaching “record losses”, flooding in Australia and South Africa, winter storms in Europe and the US and droughts in Europe, China and America.
According to the document, 2022 was the second year in a row that insured losses from natural disasters exceeded $100 billion, and the fourth year with the highest total losses (not necessarily insured).
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The scale of these economic impacts is due, in part, to the fact that assets have increased exposure to natural risks, vulnerabilities exacerbated by inflation, said Martin Bertogg, head of catastrophic risk at Swiss Re.
The increase in losses, which is amplified by the concentration of value in vulnerable areas, is, according to Bertogg, “a wake-up call to reflect this impact factor even more carefully in risk assessments, while continuing to help society to be better prepared.”
“Property catastrophe reinsurance rates rose to a 20-year high at renewal in January 2023, continuing a trajectory that began in 2018,” the report said.
Experts predict that interest rates will continue to rise as “the economic storm is not over yet” and the natural disaster situation, which leads to the population insuring more goods, is associated with inflationary pressure and the subsequent increase in costs. higher financing costs.
As a result, “insurance opportunity providers are likely to continue to be more cautious when allocating capital for a variety of reasons, including risk assessment and loss experience,” the reinsurer notes.
“As risk exposure increases and risk appetite declines, price escalation is likely to continue, with holdings rising and conditions tightening,” said Jérôme Jean Hegely, chief economist at Swiss Re.
The main cause of losses in 2022 was Hurricane Ian, the biggest loss of the year and, after Katrina (2005), the second most costly natural disaster in terms of insured losses according to the Sigma report.
Even as a storm, when it reached the southern state of Florida, accustomed to this type of extreme event, with a Category 4, it caused an estimated insurance loss of $50,000 to $65,000 million.
In Europe, the hurricanes that hit the northwest in February 2022 cost more than $4,000 in cumulative insurance damage, nearly double the average for the previous ten years.
Meanwhile, France has recorded its biggest annual hail damage, which has caused $5 billion in damage.
Last year’s floods around the world were also more costly than average: never before have floods resulted in such high insurance losses as those suffered by eastern Australia between February and March 2022, amounting to $4.3 billion. , which, in turn, caused the largest natural disaster. loss ever recorded in an ocean country.
The lack of rain due to “weather volatility and abnormal atmospheric circulation conditions” also weighed on the bills: in Brazil, a crop hit by severe droughts and heat waves was worth $1 billion in insured losses.
EFE
Source: Aristegui Noticias
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