Global natural disasters in the first half of 2022 will cost insurers about US$34 billion, which covered just over half of the total $65 billion in losses from floods, earthquakes and storms during the first six months, according to Munich Re.
The aggregate total is below $105 billion in losses from the previous year.
At the top of the list of natural disasters was the extreme rainfall and subsequent flooding in Australia. Parts of Queensland and New South Wales have experienced record rains and flooding, with the last week of February being the wettest week since 1900 and some areas experiencing the highest flooding peaks since 1893. Preliminary estimated costs to the insurance industry are currently $3.7 billion.
Also contributing to the grand total was a 7.3 magnitude earthquake in Japan. Insured losses were $2.8 billion. Munich Re reported that the Asia-Pacific region saw a higher-than-normal total loss of $22 billion, with insured losses of $8 billion.
However, the US accounted for about $28 billion of the total and $19 billion in insured losses, largely due to severe thunderstorms with tornadoes, Munich Re said. During the first six months, severe thunderstorms caused $22 billion in losses, with insured losses of $17 billion.
“A single thunderstorm front that triggered tornadoes in early April destroyed assets worth more than $3 billion, three-quarters of which were insured — a perfect example of how high insurance density can help cushion the economic shocks of natural disasters,” Munich Re said.
The reinsurer added that extreme heat, drought and wildfires are increasing in many regions of the world, and the Intergovernmental Panel on Climate Change warned of the need for insurers to adopt loss models.
Ernst Rauch, chief climate scientist at Munich Re, and head of the Climate Solutions Unit said: “What used to be warm days will be warm days, what used to be warm days will be extremely hot days. Drought and wildfires are a direct result here They can all be individual events with different causes, but together one thing becomes very clear: the powerful influence of climate change is becoming more and more apparent!”
“Loss prevention is a fundamental part of mitigating the economic effects of climate change. It is therefore extremely worrying that insurance penetration in developing and emerging countries is stagnating well below 10%, and that there is much room for improvement even in industrialized countries,” said Torsten Jeworrek, Member of the Board of Directors.
Also read: Natural Disasters Cost Insurers $39 Billion During H1 2022, 18% More Than Average: Aon
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