Natural Disasters Cause Hundreds of Billions in Damages

The force of nature, including its destructive power, is well known. Earthquakes in Turkey and Syria, storms in the United States, and other natural disasters last year caused global losses of $250 billion, and less than half of these losses were covered by insurers, according to data published by the German reinsurance group Munich Re. The total losses caused by natural disasters are similar to those in 2022 but above the average of the last 10 and 30 years, due to earthquakes in Turkey and Syria. North America was once again responsible for a large part of the losses, even though the U.S. had a less severe hurricane season than in 2022, and many insured losses came from regional storms. Ernst Rauch, Munich Re's chief climate researcher, says insurers now need to rethink how they classify storms. "We used to refer to secondary storms as secondary hazards because they only caused small to medium damages. However, as the number of storms increases, we need to think about a new classification," said Ernst Rauch. Overall, insurer losses from natural disasters decreased last year to $95 billion, from $125 billion in 2022. But despite the decrease, the figure for 2023 is above the average of the last ten years ($90 billion) and well above the average of the last 30 years ($57 billion). The earthquakes in Turkey and Syria were the most destructive events in 2023, causing 58,000 deaths, total losses of $50 billion, and losses of $5.5 billion covered by insurers. Also in 2023, insured losses from severe storms, characterized by heavy rain, strong winds, hail, and floods, reached $50 billion in the United States and $8 billion in Europe, both record figures, according to Munich Re. In Europe, hail with a diameter of up to 19 centimeters caused billions of dollars in losses in northern Italy and other regions in July and August. In the U.S., some of the largest storm-related losses were in the Midwest in March and in Texas in June. Scientists have warned that atmospheric warming will cause even more damage in the coming decades. In some cases, insurers have raised the rates they charge due to the increased likelihood of natural disasters, and in some places, they have stopped offering coverage against natural disasters.