Swiss Re Institute’s preliminary sigma estimates insist that the year 2021 will see global insured catastrophe losses of $112 billion; consisting of $105 natural catastrophe insured loss and $7 billion man-made insured loss.
Consequently, the report highlights the need for significant investment in strengthening critical infrastructure to mitigate the impact of extreme weather conditions.
It also states that natural catastrophes in 2021 included a deep winter freeze, floods, severe thunderstorms, heatwaves and a major hurricane, leading to the fourth-highest annual insured loss from natural catastrophes since 1970.
What they are saying
According to Swiss Re, Hurricane Ida was the costliest natural disaster in 2021 while winter storm Uri and other secondary peril events caused more than half of total losses especially as wealth accumulation and climate change effects in disaster-prone areas drive claims adding that man-made disasters triggered another $7 billion of insured losses, resulting in estimated global insured losses of $112 billion in 2021.
Martin Bertogg, head of catastrophe perils at Swiss Re said, “In 2021, insured losses from natural disasters again exceeded the previous ten-year average, continuing the trend of an annual 5% to 6% rise in losses seen in recent decades. It seems to have become the norm that at least one secondary peril event such as a severe flood, winter storm or wildfire, each year results in losses of more than $10 billion. At the same time, Hurricane Ida is a stark reminder of the threat and loss potential of peak perils. Just one such event hitting densely populated areas can strongly impact the annual losses.”
Jerome Jean Haegeli, Swiss Re’s group chief economist also said that the impact of the natural disasters experienced this year once again highlights the need for significant investment in strengthening critical infrastructure to mitigate the impact of extreme weather conditions.
“Investments in infrastructure support sustainable growth and resilience, and need to be upscaled. In the US alone, the infrastructure investment gap to maintain critical and ageing infrastructure is $500 billion on average per year until 2040. Partnering with the public sector, the insurance industry is critical for strengthening society’s resilience to climate risks, by investing in and underwriting sustainable infrastructure,” he said.
Meanwhile, Swiss Re noted that its estimates are for property damage and exclude claims related to Covid-19, and are preliminary and subject to change as not all loss-generating events have been fully assessed yet.
