Almost half are insured
Total damage from natural disasters increases
31.07.2024, 13:15
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According to Munich Re, natural disasters caused 120 billion dollars’ worth of damage worldwide in the first half of the year. This means that costs are rising in a long-term comparison. This is also reflected in the total amount of insured losses. One expert also sees anomalies in natural events.
Floods, storms and other natural disasters caused worldwide damage of 120 billion US dollars in the first half of the year and cost 4,500 lives. According to the half-yearly disaster report by reinsurer Munich Re, the damage is lower than in the first half of 2023, but higher than both the ten-year and thirty-year averages. “If you put this into a longer period of time, the total damage is increasing significantly,” said chief climatologist Ernst Rauch. Both major floods and the series of severe storms in the USA were noticeable in the first half of the year.
Of the 120 billion US dollars in total economic losses, 62 billion were insured, according to Munich Re. The most expensive event was the New Year’s earthquake of magnitude 7.5 in Japan, which caused estimated total losses of around 10 billion US dollars. In the first half of 2023, total global losses caused by natural disasters were higher at 140 billion US dollars, according to Munich Re, while insured losses were slightly lower at 60 billion US dollars. A key factor here was the devastating earthquake in Turkey and Syria in February 2023, which claimed more than 50,000 lives. In the earthquake region there, only comparatively few people and companies are insured against natural disasters.
Munich Re has been documenting the worldwide damage caused by natural disasters for many decades, as this is of great importance for calculating insurance premiums. “The ten-year average of economic damage is just under 90 billion US dollars,” said Rauch. “The total insured damage shows the trend even more clearly: the 62 billion US dollars in the first half of this year compared to just 37 billion in the ten-year average. So we are almost seeing a doubling.” The fact that damage is increasing on average over the longer term is, according to Munich Re and others, linked to the increasing frequency and severity of storms – a phenomenon that scientists believe is due to climate change.
Disasters more frequent and intense
Rauch mentioned two unusual events in the first half of the year: “We not only had floods here on our doorstep in Bavaria and Baden-Württemberg. The special feature was flooding in countries where major floods are atypical, such as the United Arab Emirates, especially Dubai, but also neighboring regions such as Oman.”
You have to look back 70 years in the statistics to even find comparable events. “Something similar was observed in Brazil with rainfall and flooding on a scale that is unprecedented in the last 70, 80 years.” The scientist sees the second striking feature in the many severe thunderstorms in the USA, where 1,250 tornadoes were counted from the beginning of January to the end of June alone. “Four of the five most expensive insurance events in the first half of 2024 were severe storms in the USA.
The course of the hurricane season in the North Atlantic, which only ends in the fall, will play a major role in the second half of the year. One element in this is the unusually high water temperatures in the North Atlantic for some time now. “Record water surface temperatures are a key factor in the triggering and strength of tropical cyclones,” said climatologist Rauch. “The second factor is forecast by the American weather service NOAA, the start of a so-called La Niña phase.” Both of these factors increase the likelihood of an above-average frequency of hurricanes in the North Atlantic. For insurers, the development means higher costs: “More frequent and more intense weather-related disasters mean that insurance companies are increasingly faced with high claims payouts,” said Rauch.