Natural Disaster Losses Decline After Major Storms Spare U.S.

Insurance losses from natural disasters fell last year after the U.S. was spared the full wrath of a major Atlantic hurricane.

That’s according to the reinsurance firm Munich Re, which recorded total losses of $150 billion from events like hurricanes, earthquakes and wildfires last year, down from $186 billion in 2018 when two major storms hit the U.S. While the 2019 Atlantic hurricane season saw an above-average number of storms, the biggest of them swerved away from the U.S. mainland.

“It was simply luck for the U.S. that the Bahamas took the force of Hurricane Dorian,” Ernst Rauch, a climatologist at Munich Re, said of the cyclone that caused the deaths of 65 people in the Caribbean and caused more than $5 billion in damage. “If that storm had fully hit the U.S., it would be a completely different damage story.”

With the U.S. spared a direct hit from a hurricane, a cyclone that hit Japan in October was the biggest insurance event of the year. Costs from Typhoon Hagibis caused $17 billion in total damage, including $10 billion in insured losses, according to Munich Re. That system along with Typhoon Faxai, which struck the Tokyo area in September, contributed to the second consecutive year of record-breaking losses in Japan from tropical cyclones.

Damages related to the wildfire season in Australia, only partially included in the report, will likely surge once most claims have been received by around March, Munich Re said. The company declined to comment on the scale of Australian wildfire losses so far. After record losses in previous years, the wildfire season in California was less costly following a wetter winter.

The decline in insurance claims checks a trend for above long-run average losses from natural catastrophes in recent years. That had raised concerns that climate change is leading to deadlier and costlier weather events.

Still, scientists are increasingly linking a rising trend of extreme weather events to man-made climate change. Increasing average temperatures have the tendency to boots the intensity and water content of storms, leading to more violent hurricanes and typhoons.

“There is already good evidence that the fires going on now in Australia were exacerbated by the extreme heat and lack of soil moisture linked to climate change,” said Naomi Oreskes, professor of earth sciences at Harvard University.

Rauch, the Munich Re climatologist, said his company was unable to conclude that climate change was causing higher insurance losses. He pointed to studies showing conditions for wildfires were becoming more favorable and that severe thunderstorms that cause hail damage were likely to increase.

In Germany, one such storm brought hailstones the size of golf balls and caused about 1 billion euros ($1.1 billion) of damage in June, Munich Re said. A third of those costs were attributed to damaged cars and the rest to buildings.

The most fatalities came from Cyclone Idai, which hit the port of Beira, Mozambique’s second-largest city. Its winds hit 170 kilometer per hour (106 miles an hour) and caused more than 1,000 deaths. Flooding from the storm inundated Beira’s flat hinterlands, destroying crops. The losses in Mozambique were about a 10th of its annual gross domestic product, Munich Re said.

About the photo: An aerial photo of Davenport, Iowa, shows Modern Woodmen Park, top, and the surrounding area covered by Mississippi River floodwaters, Friday, May 3. Iowa Gov. Kim Reynolds visited Davenport Friday. Several blocks of downtown Davenport were flooded this week when a flood barrier succumbed to the onslaught of water. (Kevin E. Schmidt/Quad City Times via AP)