Aug 10, 2023 - Economy

Report: Severe storms in U.S. this year lead to record insured losses

Lightning strikes the sky above the city of Houston, Texas, earlier this year. Photo: Chen Chen/Xinhua via Getty Images

Severe storms that swept much of the U.S. in the first half of this year resulted in $34 billion in insured losses — the "highest ever" recorded in a six-month period.

The big picture: That's according to a report out Wednesday from Swiss Re Group, which estimated global insured losses from natural catastrophes at $50 billion — the second highest since 2011. "The effects of climate change are evident in increasingly extreme weather events," the report notes.

Zoom in: Thunderstorms were the main driver of losses in the U.S. and Texas was the worst-affected state, according to the report.

  • 10 events caused losses of $1 billion and above each, compared to an annual average of six events for the previous 10 years.

Of note: A report from the reinsurer Munich Re last month found the "costliest single event of the year so far was a series of thunderstorms in mid-June, which affected large parts of Texas."

  • Over 50 tornadoes were recorded during this period, per Munich Re — which estimated the overall loss for this outbreak to be about $8.4 billlion, of which roughly $ 7 billion was insured.
  • Overall losses from the severe weather in the first half of the year came to more than $35 billion, of which over $25 billion was insured, according to that report.

Zoom out: In the latest report, Swiss Re Group estimated the overall economic losses from natural catastrophes for the first half of 2023 amounted to $120 billion, globally, 46% above the 10-year average.

  • "The above-average losses reaffirm a 5–7% annual growth trend in insured losses, driven by a warming climate" and "rapidly growing economic values in urbanized settings," per the report.

Context: Climate change is causing both extreme heat and precipitation events to be more intense and frequent.

What they're saying: "The effects of climate change can already be seen in certain perils like heatwaves, droughts, floods and extreme precipitation," Swiss Re's Group chief economist Jérôme Jean Haegeli said in the report.

  • "Besides the impact of climate change, land use planning in more exposed coastal and riverine areas, and urban sprawl into the wilderness, generate a hard-to-revert combination of high value exposure in higher risk environments."
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