Dec 1, 2022 - Economy

Hurricane Ian was the costliest disaster of 2022 for insured losses

Boats damaged by Hurricane Ian in Fort Myers, Florida, in September 2022.

Boats damaged by Hurricane Ian in Fort Myers, Florida, in September 2022. Photo: Giorgio Viera/AFP via Getty Images

Hurricane Ian, which struck Florida and South Carolina earlier in September as a high-end Category 4 storm, caused the second-largest insured loss on record after Hurricane Katrina in 2005, according to a new report published by reinsurer Swiss Re on Thursday.

Why it matters: Based on preliminary estimates, Hurricane Ian caused between $50 and $65 billion of insured losses, which also makes it this year's costliest natural catastrophe

  • Modeling firm RMS previously estimated in October that the storm caused $53 billion to $74 billion in insured losses from Florida to the Carolinas, with a "best estimate" of $67 billion.
  • In addition to financial losses, it killed at least at least 114 people in Florida, five others in North Carolina and one in Virginia, according to the New York Times.
  • The elevated deaths and financial losses from the storm are a result of it making landfall near densely populated areas in southwest Florida, including Ft. Myers and Naples.

What they're saying: "This highlights the threat potential of a single hurricane hitting a densely populated coastline, in an otherwise benign hurricane year," Swiss Re said.

  • "Extreme weather events have led to high insured losses in 2022, underpinning a risk on the rise and unfolding on every continent," Martin Bertogg, Swiss Re's head of catastrophe perils, said in a statement.
  • "Urban development, wealth accumulation in disaster-prone areas, inflation and climate change are key factors at play, turning extreme weather into ever-rising natural catastrophe losses," Bertogg added.

By the numbers: Globally, Swiss Re estimates that Ian and other extreme weather events, including winter storms, floods and hailstorms, caused $115 billion in insured losses in 2022, though the figure is subject to change as assessments for additional events are completed.

  • That makes 2022 the second consecutive year in which the estimated insured losses were $100 billion and continues the trend of a 5– 7% average annual increase in losses over the past decade.
  • Winter storms in Europe in February caused an estimated $3.7 billion in losses, while flooding caused by torrential rain in Australia in February and March caused $4 billion in losses — the country's costliest natural disaster.

Yes, but: Ian's financial toll in reality was much higher, as Swiss Re's report includes only insured losses and excludes uninsured damages.

  • Also, not all of this year's major natural catastrophes were included in the report's estimates, such as the weeks of deadly flooding in Pakistan that killed over 1,700 people and caused $14.9 billion in damages and $15.2 billion in economic losses, according to estimates from the World Bank.
  • While destructive, the floods did not cause high levels of insured losses that Swiss Re tracks.

The big picture: Climate change caused by the emission of greenhouse gasses is expected to make destructive weather events, including hurricanes, flooding and wildfires, more common and more intense.

  • Population growth and development in areas threatened by extreme weather events are also expected to contribute to increased financial losses from natural disasters.
  • Already, the cost and frequency of extreme weather and climate disasters have increased in recent years, Axios' Andrew Freedman reports.

Go deeper: The 2021 Pacific Northwest heat wave was a climate change warning

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