Swiss Re Ltd / CH0126881561
07.12.2023 - 10:00:11Insured losses from severe thunderstorms reach new all-time high of USD 60 billion in 2023, Swiss Re Institute estimates
| Swiss Re Ltd / Key word(s): Research Update 07.12.2023 / 10:00 CET/CEST High frequency of low single-digit billion-dollar events adds up to large insured losses that will exceed the USD 100-billion-threshold for fourth consecutive year With USD 6 billion of insured losses, the earthquake in Turkey and Syria was the costliest natural catastrophe year to date The re/insurance industry covered roughly 40% of the economic losses (USD 269 billion) this year, indicating a large protection gap across the world Zurich, 7 December 2023 – Natural catastrophes will once again break several loss records in 2023. A high number of low-to-medium-severity events will aggregate to insured losses of more than USD 100 billion in 2023, estimates Swiss Re Institute, with severe thunderstorms (severe convective storms, SCS) being the main contributor. It is the first time ever that severe thunderstorms have caused this level of loss for the industry. Jérôme Jean Haegeli, Swiss Re's Group Chief Economist, says: "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. The high frequency of severe thunderstorms in 2023 has been an earnings' test for the primary insurance industry." Losses from severe thunderstorms have steadily increased by 7% annually in the last 30 years. 2023 marks an increase of almost 90% compared to the previous 5-year average (USD 32 billion), and more than doubles the previous 10-year average (USD 27 billion). Increased losses from severe thunderstorms in the US and in Europe The US is particularly prone to SCS due to its geographical location. In 2023, the amount of USD 50 billion insured losses for US SCS activity was exceeded for the first time — and it is set to keep rising. The US has experienced 18 events year to date which each caused insured losses of USD 1 billion and above. Similarly, Europe has seen an increase in insured losses from severe thunderstorms: Italy was the most affected in 2023 as was France the year before. Italy experienced losses of more than USD 3.3 billion, the costliest natural catastrophe-related insured losses ever in Italy. Balz Grollimund, Head Catastrophe Perils, says: "For the insurance industry, recent events provide robust benchmarks for estimating the increasing loss trends. Nevertheless, to further progress the deeper understanding of this peril, it is important to get better insights from primary insurers on distributions of insured exposure and detailed claims data. It is equally important that insurance premiums adequately reflect the risk for the coverage provided especially also in light of increasing loss trends." 2023: Hurricanes, floods, wildfires and earthquakes While losses from the North Atlantic hurricane season remain below average in 2023 to date, hurricane Otis will likely become the costliest insured event in Mexico according to Swiss Re Institute. In New Zealand, floods and cyclones caused the costliest weather-related insured losses ever for the country (USD 2.4 billion), while the wildfires on Maui are estimated to become the costliest insured loss event ever for the state of Hawaii (USD 3.5 billion). Urban development, wealth accumulation in disaster-prone areas and inflation are key factors at play, turning extreme weather into ever rising natural catastrophe losses. Rising temperatures are further increasing the risk of severe droughts and wildfires. With 2023 expected to be the warmest year on record, the effects of climate change are becoming apparent. The earthquake in Turkey and Syria is the costliest natural catastrophe in 2023, with insured losses of USD 6 billion, while the Morocco earthquake was the strongest earthquake to hit the country since 1900. The disaster in Morocco also shows that rural areas are not immune to large-scale losses and need to be included in preventative efforts to improve resilience. Table 1: Estimated total economic and insured losses in 2023 and 2022 in USD billion (in 2023 prices)
For further information please contact Swiss Re Media Relations: + 41 (0)43 285 7171 or Media_Relations@Swissre.com. Please use this link to access Swiss Re's press releases. Swiss Re The Swiss Re Group is one of the world’s leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, working to make the world more resilient. It anticipates and manages risk – from natural catastrophes to climate change, from ageing populations to cyber crime. The aim of the Swiss Re Group is to enable society to thrive and progress, creating new opportunities and solutions for its clients. Headquartered in Zurich, Switzerland, where it was founded in 1863, the Swiss Re Group operates through a network of around 80 offices globally. Disclaimer Although all the information discussed herein was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the information given or forward-looking statements made. The information provided and forward-looking statements made are for informational purposes only and in no way constitute or should be taken to reflect Swiss Re?s position, in particular in relation to any ongoing or future dispute. In no event shall Swiss Re be liable for any financial or consequential loss or damage arising in connection with the use of this information and readers are cautioned not to place undue reliance on forward-looking statements. Swiss Re undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise. Cautionary note on forward-looking statements Certain statements and illustrations contained herein are forward-looking. These statements (including as to plans, objectives, targets, and trends) and illustrations provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to a historical fact or current fact. Further information on forward looking statements can be found in the Legal Notice section of Swiss Re's website. End of Media Release |
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