Market: Natural disasters cost insurers $ 120 billion in 2021, according to Munich Re

by Tom Sims and Alexander Hübner

FRANKFURT (Reuters) – 2021 was the second costliest year on record for global insurers, Munich Re said on Monday, warning that the extreme weather was likely linked to climate change.

Insured losses from natural disasters totaled around $ 120 billion (€ 106 billion) last year – below the $ 146 billion in damage suffered in 2017, the costliest year on record, marked by hurricanes Harvey, Irma and Maria.

The annual tally for Munich Re, the world’s largest reinsurer, is higher than the estimate of $ 105 billion released last month by competitor Swiss Re.

“The images of natural disasters in 2021 are worrying. Climate research further confirms that extreme weather is becoming more common,” said Torsten Jeworrek, member of the Munich Re board of directors.

Nearly 10,000 people have died from natural disasters, a figure in line with previous years. Total losses, including those not covered by insurance, amount to $ 280 billion, the fourth highest on record.

The United States, ravaged by dozens of tornadoes and cold snaps, was responsible for an unusually large share of the losses, Munich Re said.

Hurricane Ida, whose damage spread from New Orleans to New York, caused $ 36 billion in insured losses. The winter storm, which mainly hit Texas in February, resulted in losses of around $ 15 billion.

In Germany, the floods that hit the country this summer also cost billions.

“The disaster statistics for 2021 are striking because some of the extreme weather events are of the type that are likely to become more frequent or more severe due to climate change,” said Ernst Rauch, head of the science department on the climate and geology of Munich Re.

Many scientists agree that the events of 2021 were exacerbated by climate change and that other extreme events are likely to become more frequent or more serious in the future.

Some insurers have increased their rates due to the increasing likelihood of catastrophes, even ceasing to provide coverage in some locations.

As insurers warn of climate change and the associated costs, they are themselves under pressure from activists to no longer insure polluting industries.

(French version Dina Kartit, edited by Blandine Hénault)

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