Reinsurers Point to Climate Change as Insured Catastrophe Losses Surpass $30B for Half Year

An earthquake in Japan, flooding in Australia and winter storms in Europe were among catastrophes that caused more than $30 billion in insured losses during the first half of 2022, according to preliminary estimates by two major reinsurers.

Swiss Re said insured losses from natural catastrophes reached $35 billion during the first half of the year, with another $3 billion in insured losses caused by man-made catastrophes. Munich Re pegged natural catastrophe losses at $34 billion for the first half of the year.

“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,” Swiss Re said.

Insured natural catastrophe losses in the first half year were better than the $46 billion in insured losses for the first half of 2021, but 22% greater than the 10-year average, according to Swiss Re’s report.

Martin Bertogg, head of catastrophe perils, said in a statement that the impact of climate changeis evident in increasingly extreme weather events, such as 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,” he said. “Unlike hurricanes or earthquakes, these perils are ubiquitous and exacerbated by rapid urbanization 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.”

Swiss Re highlighted several catastrophes that drove insured losses above the average:

• $4 billion caused by heavy rain and hail in France.
• $3.5 billion caused by a series of winter storms in Europe, “bringing this key peril back on the insurance industry’s agenda.”
• $3.5 billion caused by widespread flooding in Australia, a new record for flood losses in the country.

Munich Re provided similar insured loss estimates for those events and added two more in its report: $2.8 billion from a March 16 earthquake in Japan and $2.5 billion from severe convective storms in the US.

Munich Re also said that the impact of climate change is clearly evident in the insured loss numbers, and is displayed as well by the heat wave that descended on Europe in late July.

“What used to be warm days will be hot days, what used to be hot days will be extremely hot days,” Chief Climate Scientist Ernst Rauch said in a statement. “Droughts and wildfires are a direct consequence of this.”

About the photo: A car is surrounded by flood water in Hamburg, Germany, Sunday Jan. 30, 2022, after a powerful winter storm swept through northern Europe over the weekend. (Daniel Bockwoldt/dpa via AP)