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Socio-economic developments and climate-change effects to drive rising losses from severe weather events

08 April 2020 Swiss Re

• Global economic losses from disaster events in 2019 were USD 146 billion; insured losses were USD 60 billion
• Once again, extreme weather events were the main loss drivers, and growing catastrophe severity will drive larger losses in the future
• Population growth, urbanisation and economic development have triggered a rise in losses from weather events
• Weather risks remain insurable, but insurers need to be wary of historical loss records while building risk models to account for socio-economic and climate trends
• Failure to take immediate tangible action to confront warming temperatures could lead to climate systems reaching irreversible tipping points

The latest sigma "Natural catastrophes in times of economic accumulation and climate change" says that Swiss Re Institute expects that global warming will lead to growing intensity and frequency of severe weather events, but also to more uncertainty in their assessment. Economic and insured losses resulting from such events will rise in the coming decades, and this presents a major threat to global resilience. Worldwide, economic losses from natural and man-made disasters in 2019 were USD 146 billion, lower than USD 176 billion in 2018 and the previous 10-year annual average of USD 212 billion. The global insurance industry covered USD 60 billion of the losses, compared with USD 93 billion in 2018 and USD 75 billion on average in the previous 10 years. While severe weather events were still the main driver of overall losses in 2019, amplified by socio-economic developments in affected areas and climate-change effects, the decrease in losses primarily stem from the absence of large and costly hurricanes in the US.

Please use this link to access the sigma Explorer. You can also watch a short video.

Please find attached the latest Swiss Re sigma study and the accompanying news release

 

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