Economic losses from natural disasters fell to $120 billion in the first half of the year, according to an estimate by Swiss Re, with storms and floods pushing up the bill for insurers.
From a natural disaster perspective, the first half of 2024 has a better record than the same period a year earlier. Indeed, the amount of damage is $32 billion less than in the first half of 2023, which was marked by a devastating earthquake in Turkey and Syria. But this amount is above the ten-year average, which stands at $98 billion for the first half of the year, the Swiss reinsurer said in a press release. Last week, its German competitor Munich Re also estimated the amount of economic losses at $120 billion in the first half of 2024.
Significant costs
Costs covered by insurers amounted to $60 billion, remaining at the same level as in the first half of 2023. Severe storms, accompanied by tornadoes, hail and heavy rainfall, alone generated $42 billion in insured losses worldwide, explains Swiss Re, which acts as insurer for insurers.
“In the United States, 12 storms each caused losses of $1 billion or more,” the Swiss group stressed in the press release. Swiss Re regularly highlights the significant costs caused by storms, with the amount of damage increasing due to several factors, including “inflation, which has contributed to an increase in building construction costs,” explains Jérôme Jean Haegeli, the group’s chief economist, quoted in the press release.
With the wave of inflation, the reinsurer had noted an increase in costs, particularly in construction, with the rise in construction materials which is driving up the cost of repairs.
$66 billion
Floods, meanwhile, accounted for 14% of insured losses, driven by events in the United Arab Emirates, Germany and Brazil. Industry estimates put insured losses for the UAE floods at “at least $2 billion, making it the costliest natural disaster on record in the country.”
Taking into account the category of so-called man-made disasters (such as fires or industrial accidents), the costs for insurers amounted to $66 billion, compared to $65 billion in the first half of 2023.
Sami Nemli With Agency / Les Inspirations ÉCO
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