Insured losses from natural catastrophes will pass the $100-billion threshold for the fourth year running in 2023, reinsurance giant Swiss Re said Thursday.
Insured losses from severe thunderstorms reached an all-time high of $60 billion in 2023, while the February earthquake in Turkey and Syria was the costliest natural catastrophe to date for the year, it said.
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“With 2023 expected to be the warmest year on record, the effects of climate change are becoming apparent,” said the company.
Nevertheless, the estimated total amount of insured losses in 2023, at $108 billion, is down by 23 percent from $141 billion recorded in 2022.
Total economic losses were estimated at $269 billion, a nine percent drop from 2022.
Natural catastrophes accounted for the overwhelming majority of the insured and total losses.
Swiss Re noted in particular the impact of a rising number of low-to-medium severity events.
“The cumulative effect of frequent, low-loss events, along with increasing property values and repair costs, has a big impact on an insurer’s profitability over a longer period,” Swiss Re’s Group Chief Economist Jerome Haegeli.
“The high frequency of severe thunderstorms in 2023 has been an earnings’ test for the primary insurance industry,” he added.
Swiss Re has calculated that losses from severe thunderstorms have steadily increased by seven percent annually over the last 30 years.
Severe thunderstorm losses in 2023 were more than double the previous 10-year average of $27 billion.
The United States has been particularly vulnerable to severe thunderstorms, experiencing 18 events causing more than $1 billion in insured losses so far this year and total insured losses surpassing $50 billion for the first time.
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