Global insured disaster losses in 2023 to top $100B
Global insured natural catastrophe losses in 2023 are expected to eclipse $100 billion for the sixth time since 2017, according to a new report from Gallagher Re, a reinsurance company.
The big picture: Severe thunderstorm-related loss events and the effects of climate change were the biggest factors behind the high losses so far, the report finds.
- Steve Bowen, Gallagher Re's chief science officer, told Axios that an annual toll of at least $100 billion per year has become a "new normal" for public and private insurance companies.
- Total economic losses from January through September have been estimated at $290 billion, Gallagher Re found.
Between the lines: "Severe convective storms" accounted for two-thirds of all global insured losses.
- This category includes thunderstorms and their related hazards such as large hail, straight-line winds and tornadoes. Such insured losses topped $50 billion in the U.S. for the first time in a single year, Gallagher Re found.
- Bowen cited climate change, increases in disaster exposure, as well as inflation, which increases recovery costs, as reasons for elevated losses.
With the year tracking toward the warmest on record, the report notes that climate change's influences on disasters, including worsening heat waves and related droughts and wildfires, as well as flooding, are also driving up disaster costs.
- In the U.S. during the past year, there have been major increases in insurance premiums in states that are especially at risk for disaster losses, with some carriers ceasing to operate in these areas.
- This includes Florida, Louisiana and California, and Bowen said insurance customers may face sticker shock in places that don't face hurricanes and wildfires but saw repeated, expensive severe thunderstorm events this year.
The bottom line: "We're in an increasingly risky world and frankly it's one that shows no signs of slowing down the acceleration that we've seen over the last few years," Bowen told Axios in an interview.