Natural disasters are projected to cause insured losses of $108 billion in 2023, the fourth consecutive year that losses have exceeded $100 billion, according to a report from Swiss Re Ltd. on Tuesday.
The reinsurer said it now estimates annual insured losses will increase by 5% to 7% in the long term, largely driven by risk growth, especially in areas with high catastrophe risk such as flood plains or coastlines. .
Although below 2022’s $133 billion in natural disaster losses, 2023’s $108 billion is well above the 10-year average of $89 billion, according to Swiss Re data.
According to the report, the biggest loss event of 2023 was the earthquake in Turkey and Syria, with insured losses estimated at $6.2 billion, although the earthquake affected areas with less insurance access, and about 90% of economic losses were covered. had not been.
In the absence of any major U.S. hurricane, total insured losses were driven by numerous smaller events.
There were 142 insurance-loss-inducing disasters in 2023, most of which were of moderate severity, defined as events that resulted in losses of $1 billion to $5 billion. Swiss Re said the number of such incidents has increased by an average of 7.5% each year since 1994, almost double the 3.9% increase for all catastrophes.
Among these moderate-severity events, severe convective storms caused an estimated $64 billion in insured losses last year, the highest ever for this risk.
The report notes that hail is by far the main damaging component of severe convective storms, making older roofs, which increasingly allow the installation of glass solar energy systems, a major source of damage.
