The aftermath of natural disasters in 2023 left a hefty price tag of $280 billion in damages across the globe, with insurance firms footing $108 billion of the bill, as disclosed by Swiss Re, a prominent player in the insurance industry.
On Tuesday, the company sounded the alarm, projecting a potential doubling of these expenses within the next ten years.
Compared to 2022, both the overall damage and the portion covered by insurers witnessed a decline. This downturn contrasts sharply with the previous year, marked by the devastating Hurricane Ian, one of the deadliest storms to strike the United States in recent memory, which drove costs to unprecedented heights.
Natural disasters in 2022 resulted in a hefty $286 billion in damages, with insurers footing a significant $133 billion of the expenses.
Even with a dip compared to the previous year, insurers surpassed the $100-billion milestone for the fourth consecutive year in 2023, as revealed in Swiss Re’s Sigma study.
The comprehensive annual report from the Zurich-based organization, serving as an insurer for insurers, meticulously details the financial ramifications of disasters and natural calamities.
“Even without a historic storm on the scale of Hurricane Ian, which hit Florida the year before, global natural catastrophe losses in 2023 were severe,” said Swiss Re chief economist Jerome Jean Haegeli.
“This reconfirms the 30-year loss trend that’s been driven by the accumulation of assets in regions vulnerable to natural catastrophes.
“In the future, however, we must consider something more: climate-related hazard intensification.
“Fiercer storms and bigger floods fuelled by a warming planet are due to contribute more to losses.
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“This demonstrates how urgent the need for action is, especially when taking into account structurally higher inflation that has caused post-disaster costs to soar.”
Estimated insured losses totalled $6.2 billion, with the earthquake dramatically illustrating coverage gaps around the world, said the report. Economic losses reached $58 billion but the earthquake hit poorly insured areas, with around 90 percent of losses not covered, the report said.
The earthquake that rocked Turkey and Syria in 2023 proved to be the most expensive natural disaster of the year. Insurance claims soared to an estimated $6.2 billion, shedding light on the pervasive coverage deficiencies worldwide, as outlined in the report.
The seismic event resulted in economic losses amounting to $58 billion, yet it disproportionately affected areas with insufficient insurance protection, leaving approximately 90 percent of losses unshielded, as outlined in the report.
“Even without a historic storm on the scale of Hurricane Ian, which hit Florida the year before, global natural catastrophe losses in 2023 were severe,” said Swiss Re chief economist Jerome Jean Haegeli.
“This reconfirms the 30-year loss trend that’s been driven by the accumulation of assets in regions vulnerable to natural catastrophes.
“In the future, however, we must consider something more: climate-related hazard intensification.
“Fiercer storms and bigger floods fuelled by a warming planet are due to contribute more to losses.
“This demonstrates how urgent the need for action is, especially when taking into account structurally higher inflation that has caused post-disaster costs to soar.”
The yearly summary provided by the Zurich-based organization, serving as an insurer for insurers, offers a comprehensive breakdown of the expenses incurred from disasters and natural disaster.
Economic losses soared to $58 billion, with the report noting that the earthquake disproportionately affected inadequately insured areas, leaving around 90 percent of losses uninsured.