Reinsurers complain about increasing storm losses – economy

Last year, extreme weather events and natural disasters reached new negative records. Experts from the reinsurer Swiss Re have calculated that there were 142 storms worldwide in 2023. These include severe thunderstorms, hailstorms, floods and blizzards. “This has never happened since weather records began,” said Jérôme Jean Haegeli, chief economist at Swiss Re. One reason for the many Thunderstorm: 2023 was the hottest year ever recorded.

The result is billions in insured losses. In 2023, companies worldwide paid $108 billion or 99.8 billion euros. That is well below the value of the record year 2017, when they had to pay $177 billion for storm damage. But what worries corporate scientists is that 2023’s storm damage has cost more than $100 billion for the fourth year in a row.

Since 1994, losses have grown twice as fast as GDP

More than half of this damage, around 59 percent or $64 billion, was caused by thunderstorms – another record. The severe hailstorms were particularly expensive. The USA accounted for 85 percent of the damage from severe thunderstorms. Experts see an increasing risk of hail for Europe and especially for Germany, France and Italy.

If you compare the insured losses and global economic performance, a worrying development emerges: since 1994, claims have grown by an average of 5.9 percent per year, adjusted for inflation, but global gross domestic product has only grown by 2.7 percent. Damages therefore grew twice as fast as GDP.

Now things could go even faster. Swiss Re experts fear that the amount of insured losses resulting from extreme weather events could double in the next ten years if appropriate measures are not taken. They advocate adapting building regulations to do more for prevention. The construction of dikes and other systems that protect against floods and similar dangers can also help, as can a ban on settlements on river banks.