Munich A growing number of severe natural catastrophes have caused severe damage on all continents in the past year. Hurricane Ian, which hit the west coast of Florida at the end of September, was the second costliest hurricane in history in terms of insured losses, adjusted for inflation. According to calculations by Munich Re, around $60 billion of a total loss of $100 billion was insured.
Only Hurricane Katrina was even more expensive for insurers in 2005. “The natural catastrophe record is dominated by events that, according to the current state of research, are becoming stronger and more frequent,” says Munich Re board member Thomas Blunck, assessing the latest figures.
2022 was by no means a record year: According to calculations by Munich Re, global losses from storms, forest fires, thunderstorm damage and flooding totaled 270 billion dollars. A year earlier it was a good $50 billion more.
However, the sum of insured losses has remained the same at around 120 billion dollars. “All in all, the world is increasingly affected in its breadth,” says Ernst Rauch, chief climatologist at Munich Re.
Top jobs of the day
Find the best jobs now and
be notified by email.
>>Read here: High claims, strong business: Munich Re is benefiting from rising demand for insurance cover
For example, the sudden development of claims in Australia was striking last year. The floods in the south-east of the fifth continent in February and March led to the second most expensive natural catastrophe after insurance losses, because they also reached the metropolises of Brisbane and Sydney.
According to Rauch, a total loss of 6.6 billion dollars, of which around 4 billion dollars were insured, corresponds to around two to three times the previous record loss observed in floods in Australia.
Weather phenomenon in the Pacific
In addition to the consequences of climate change, experts also attach enormous importance to the weather phenomena El Niño and La Niña in the Pacific for the number and extent of natural disasters. Both are about the surface water temperature in the Pacific. Put simply, this is too warm during El Niño and too cold during La Niña. La Niña conditions have prevailed for the past three years, meaning the water has been too cold.
“This increases the likelihood of hurricanes in North America, floods in Australia, heat and drought in China or heavier monsoon precipitation in parts of South Asia,” says Rauch. In contrast, forest fires and heat waves are more likely in El Niño years.
In general, the insurance density in OECD countries is significantly higher than in developing countries. The effects were particularly evident after the heavy monsoon rains in Pakistan. There, in August, the precipitation was five to seven times as heavy as usual. Amplified by the heavy melting of the glaciers as a result of excessively high temperatures, the flood damage was above average.
Almost none of the estimated losses of around 15 billion dollars – more than four percent of Pakistan’s gross national product – were insured. For a poor country like Pakistan, such a sum is a huge burden in relation to its economic power.
“Ultimately, it is an unbearable situation because the country is being thrown back so permanently economically,” says chief climatologist Rauch. At the most recent world climate conference COP27, the right goals were agreed with the agreed “Loss and Damage” fund for climate reparation payments, but these now have to be quickly converted into actionable instruments. “My optimism is muted here,” admits Ernst Rauch.
Severe winter storms in Germany
For Germany, the past year brought only average losses despite record heat in the summer. The cost of storm, hail and heavy rain was 4.3 billion euros. The industry association GDV calculated this at the end of the year.
The hurricanes “Ylenia”, “Zeynep” and “Antonia” caused the most expensive damage in Germany in February. “With a total of 1.4 billion euros, the storm series is in third place among the most severe winter storms since 2002,” says Jörg Asmussen, general manager of the industry association.
However, such sums are no comparison to 2021, which was the most expensive natural hazard year in Germany for insurers since statistics began in the 1970s, mainly because of the storm surge in the Ahr Valley with total damage of 12.6 billion euros.
As a consequence, the number of buildings protected against such damage by so-called elementary insurance has increased. However, nationwide it is only around half.
However, the experts do not yet have exact figures for the severe winter storms and the extreme cold spell that hit the USA in December. According to Ernst Rauch, it is still too early for reliable estimates.
Although it is now clear what has been damaged by snowfall, it will only become clear in a few weeks how high the costs of frost damage, for example to water pipes, are. “In the future, we will see extreme outbreaks of polar cold air deep in the south of the USA more often,” Rauch expects.
More: Cyber attacks, natural catastrophes, inflation: reinsurers are feeling the effects of the multi-crisis