Surge in weather-related disasters delivers hefty financial blow to insurers in 2016
Over the last three years, insurance losses from natural catastrophes such as storms, earthquakes and flooding has remained relatively low. But that reprieve came to a sharp end in 2016, according to new data released yesterday by reinsurer Munich Re.
Global losses from natural disasters hit a four-year high of $175bn – a two-thirds increase on 2015 levels – driven by increasingly powerful storms and “exceptionally” high number of severe floods, the company said.
In its annual natural catastrophe review, Munich Re said flooding, including river flooding and flash flooding, caused more than a third of all losses – far above the 10-year average of 21 per cent. Flash floods which blighted much of Europe last Spring, including major capitals such as Paris, caused around $6bn of damage, while flooding in China last summer caused $20bn of damage, Munich Re said.
Storms, droughts and wildfires also wreaked havoc. Wildfires in Alberta generated $4bn of losses, while Hurricane Matthew struck Haiti and the east coast of the USA, killing 550 people and causing more than $10bn of damage.
Some 8,700 people lost their lives due to natural disasters around the world last year, although this is far fewer than in 2015, when more than 25,000 perished, the report said.
Peter Höppe, head of Munich Re’s geo risks research unit, warned climate change will increase the likelihood the world will suffer devastating events like those seen in 2016 on an increasingly frequent basis.
“A look at the weather-related catastrophes of 2016 shows the potential effects of unchecked climate change,” he said in a statement. “Of course, individual events themselves can never be attributed directly to climate change. But there are now many indications that certain events – such as persistent weather systems or storms bringing torrential rain and hail – are more likely to occur in certain regions as a result of climate change.”