The US led the loss tally with almost half of overall economic losses in the first six months of 2022, and nearly two thirds of insurance losses
The first half of 2022 saw lower natural disaster losses than in the comparative period of 2021, according to Munich Re. Floods, earthquakes and storms caused overall losses of some $65 billion compared with $105 billion in the loss-heavy previous year. At around $34 billion, insured losses were roughly in line with previous years.
With a figure around $28 billion, the US accounted for almost half of overall losses in the first six months of 2022 and nearly two-thirds of insured losses, with a figure of $19 billion.
A series of severe thunderstorms with tornadoes was the principal cause of these losses. A single thunderstorm front that produced tornadoes in early April destroyed assets worth over $3 billion, three-quarters of which were insured – a perfect example of how high insurance density can help absorb the economic shocks of natural disasters.
In the first half of the year, severe thunderstorms in the US caused losses totalling $22 billion, with insured losses of $17 billion.
Above average hurricane season expected
This year’s tropical storm season is expected to bring above-average storm activity in the North Atlantic due to the El Niño-Southern Oscillation (ENSO) natural climate phenomenon in the Pacific.
We are currently witnessing prevailing La Niña conditions in the Pacific, which promote the formation of hurricanes in the North Atlantic. Leading research institutes believe that the current weak La Niña conditions could become even more pronounced during the main phase of the hurricane season in September.
Munich Re expects 18 (±3) named tropical storms, 8 (±2) hurricanes and 4 (±2) severe hurricanes. Forecast models of external research institutes expect storm activity to be towards the upper end of the scale. By the end of June, three tropical cyclones had formed in the North Atlantic, none of which reached hurricane strength.
Meanwhile, winter storms, particularly in February, swept across north and northwest Europe bringing hurricane-force winds in places. Ireland, England, parts of Belgium, the Netherlands, northern Germany and the Baltic coast were hit especially hard. The outcome: overall losses of $5.2 billion.
Weather extremes become the norm
”The natural disaster picture for the first half of 2022 is dominated by weather-related catastrophes,” said Torsten Jeworrek, member of the board of management at Munich Re.
”Extreme tornadoes in the US caused billions in damage, parts of eastern coastal Australia were submerged by floods, and southern Europe struggled with extreme heat, wildfires and drought.
”The recently published IPCC report warned of the need for insurers to adapt their loss models to adequately assess the changing risk. Loss prevention is a fundamental component in mitigating the economic effects of climate change.
”It is therefore extremely worrying that insurance penetration in developing and emerging nations is stagnating at well below 10%, and that even in industrial countries there is much room for improvement.”