Global economic losses from natural and man-made catastrophe events are estimated at USD 75 billion in the first half of 2022, according to a latest report prepared by Swiss Re Institute.
Floods in Bangladesh further confirm the growing loss potential from floods in urbanised areas, it said.
Fueled by storms and floods, total economic losses caused by natural disasters stood at $72 billion in the first half of 2022, the Swiss reinsurance giant Swiss Re estimated.
However, total economic losses caused by both natural and man-made catastrophe remain lower than the $91 billion estimate for the first six months of 2021, it said.
On the other hand, the figure is shown as close to the 10-year average of $74 billion, Swiss Re Institute reveals.
A series of winter storms in Europe, unprecedented flooding in Australia and South Africa as well as a high number of thunderstorms in the US and Europe resulted in USD 35 billion of insured losses from natural catastrophes in the first half of 2022, according to Institute’s preliminary estimates.
Man-made events triggered an additional USD 3.0 billion in insured losses, bringing total catastrophe insured losses to USD 38 billion.
The record-high temperatures in many parts of Europe may lead to further losses caused by droughts and wildfires. The severe weather events of the past six months once again highlight that natural catastrophes, particularly secondary perils, are increasing in frequency and severity in all regions.
Secondary perils such as hailstorms and flooding continue to drive insurance losses globally, exacerbated by rapid urban development and wealth accumulation in disaster-prone areas, the report adds.
Martin Bertogg, Head of Catastrophe Perils at Swiss Re, said: "The effects of climate change are evident in increasingly extreme weather events, such as the unprecedented floods in Australia and South Africa”.
This confirms the trend we have observed over the last five years, that secondary perils are driving insured losses in every corner of the world, Martin said.
“Unlike hurricanes or earthquakes, these perils are ubiquitous and exacerbated by rapid urbanisation in particularly vulnerable areas. Given the scale of the devastation across the globe, secondary perils require the same disciplined risk assessment as primary perils such as hurricanes, "Bertogg said.
In February, a series of winter storms hit Europe and prompted estimated insured losses of USD 3.5 billion, bringing this key peril back on the insurance industry's agenda.
In February and March, torrential rains led to widespread flooding in Australia. It set a new record for flood losses in the country at so far close to USD 3.5 billion. For the insurance industry, this is one of the costliest natural catastrophes ever in the country and the costliest event globally in the first half of 2022, in terms of insured losses.
Floods in South Africa as well as in India, China and Bangladesh further confirm the growing loss potential from floods in urbanized areas globally.
In the first half of 2022, severe weather including hailstorms and heavy rain hit France, so far causing an estimated EUR 4 billion of insured market losses, based on data from the French Federation of Insurance Companies.
Two severe summer heatwaves resulting in record-high temperatures across Europe have sparked destructive forest fires across southwest Europe.
The global average temperature for June 2022 was about 0.3°C higher than the 1991-2020 average, making it the third warmest June on record. As warming climate is predicted to exacerbate droughts, the likelihood of wildfires increases, causing greater damage where rapid urban sprawl overlaps the wildland-urban interface.
Jérôme Jean Haegeli, Swiss Re’s Group Chief Economist, said: “Climate change is one of the biggest risks our society and the global economy is facing. With 75 per cent of all natural catastrophes still uninsured, we see large protection gaps globally exacerbated by today's cost-of-living crisis. Partnering with the public sector, the insurance industry is critical for strengthening society's resilience to climate risks, by investing in and underwriting sustainable infrastructure."
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