Insurance Natural disasters cause extensive damage worldwide

In the first six months of the year, natural catastrophes once again caused high losses worldwide. The main drivers were severe thunderstorms in the USA, as the Swiss Re Institute writes in a press release on Wednesday.

The reinsurer estimates the economic costs of natural and man-made disasters in the first half of 2024 at a total of USD 127 billion. In the first half of 2023, the figure was significantly higher at USD 159 billion.

However, only USD 66 billion of the catastrophe losses were insured, compared to USD 65 billion in the previous year. According to Swiss Re, natural catastrophes alone burdened insurance companies' balance sheets with an estimated 60 billion dollars.

High thunderstorm losses

Severe thunderstorms with strong winds, hail and heavy rain are particularly significant. These caused insured losses of 42 billion dollars worldwide. In the USA alone, twelve storms were recorded with losses of at least one billion dollars each.

According to calculations by the Swiss Re Institute, insured losses from severe storms in the USA have risen by 8 percent annually since 2008. One of the reasons for this is the rise in construction costs due to inflation, according to chief economist Jérôme Jean Haegeli in the press release.

"Exposure continues to rise in line with economic development. It is therefore imperative to invest in protective measures," Haegeli continues. He cites flood protection and improved building regulations to protect houses from severe hailstorms as examples of such measures.

Flash floods in the Emirates

A total of 14 percent of all insured losses were caused by flooding, mainly in the United Arab Emirates, Germany and Brazil. In April, thunderstorms on the Arabian Peninsula caused flash floods with damage amounting to at least 2 billion dollars.