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 extreme weather was likely linked to climate change.

Insured losses from natural disasters totaled around $120 billion last year — below the $146 billion in damages suffered in 2017, the costliest year on record, hit by hurricanes Harvey, Irma and Maria.

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

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

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

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

Hurricane Ida, whose damage spread from New Orleans to New York, resulted in $36 billion in insured losses. The winter storm, which primarily affected Texas in February, resulted in losses of about $15 billion.

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

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

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

Some insurers have raised their rates due to the growing likelihood of disasters, even ceasing to provide coverage in some locations.

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

(French version Dina Kartit, edited by Blandine Hénault)

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