Insured losses for first-half 2021 natural disasters total $42B
The Swiss Re Institute's estimate for catastrophe losses is the second-highest on record for a first-half period after 2011.
Natural catastrophes during the first six months of 2021, including a deep winter freeze, hailstorms, and wildfires, contributed to insured losses totaling $42 billion globally, says Swiss Re Institute’s preliminary sigma estimates. Man-made disasters triggered approximately another $2 billion of insured losses.
According to Swiss Re, natural disaster losses this year are above the previous ten-year average of $33 billion and are the second-highest on record for a first-half period after 2011 when the six-month total reached $104 billion.
Additionally, global economic losses from disaster events are estimated at $77 billion in the first half of 2021, below the ten-year average of $108 billion. However, Swiss Re advises that the economic loss figure is likely to increase as more losses are accounted for in the next few months. Swiss Re also noted that nearly 4,500 people lost their lives or went missing worldwide in disaster events in the first six months.
The driver behind these increasing losses: Climate change, says the reinsurer.
“The effects of climate change are manifesting in warmer temperatures, rising sea levels, more erratic rainfall patterns, and greater weather extremes,” said Swiss Re’s Head of Cat Perils Martin Bertogg in the report. “Taken together with rapid urban development and accumulation of wealth in disaster-prone areas, secondary perils, such as winter storms, hail, floods, or wildfires, lead to ever-higher catastrophe losses. The experience so far in 2021 underscores the growing risks of these perils, exposing ever larger communities to extreme climate events. For example, winter storm Uri reached the loss magnitude that peak perils like hurricanes can wreak. The insurance industry needs to upscale its risk assessment capabilities for these lesser monitored perils to maintain and expand its contribution to financial resilience.”
Severe weather in Q1 and Q2, more losses expected in the second half
Winter storm Uri that caused $15 billion in losses accounts for about 38% of Swiss Re’s loss estimate for the first half. Other major natural disaster events from the first two quarters of 2021 include thunderstorms, hail, and tornadoes affecting Germany, Belgium, the Netherlands, Czech Republic, and Switzerland, and extreme heat and drought in North America that ignited wildfires along the U.S. West Coast.
Already in the first few weeks of the second half of the year, beginning July 1, the world has experienced catastrophic natural disasters, including the Dixie Fire in California that is now the largest ever on record in the state, and historic fires in Europe.
Most recently, an earthquake struck Haiti on August 14, killing more than 2,100 people. Early estimates from Karen Clark & Company state the insurable losses from this event to be around $1.7 billion, with insured losses approaching $250 million.
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