A deep winter freeze, hailstorms and wildfires contributed to natural catastrophe losses of $42bn (£30.4bn) in the first half of 2021, according to Swiss Re Institute’s preliminary sigma estimates.
This is above the previous 10-year average of $33bn (£23bn) and the second highest on record for a first half after 2011, when major earthquakes in Japan and New Zealand pushed the six-month total to $104bn (£75bn).
It found that man-made disasters triggered another estimated $2bn (£1.4bn) of insured losses in the first half this year, less than usual and likely reflecting remaining Covid-19 restrictions.
Swiss Re added that global economic losses from disaster events are estimated at $77bn (£77bn) in the first half of 2021 – below the 10 year average of $108bn (£78.2bn). The economic loss figure is expected to rise as more losses are accounted for in the coming months. The first half of the year is also not representative of the full-year figures, because the third quarter historically is the most loss-prone in terms of natural catastrophes.
It comes after a period of extreme cold combined with heavy snowfall and ice accumulation in the US – winter storm Uri – in February triggered estimated insured losses of $15bn (£10.8bn), the highest ever recorded for this peril in the US and around 38% of all estimated insured losses from natural catastrophes in the first half of this year.
In June, severe weather including thunderstorms, hail and tornadoes hit Europe, affecting homes and vehicles in Germany, Belgium, the Netherlands, Czech Republic and Switzerland. Swiss Re said insured losses from this convective storm activity are estimated at $4.5bn (£3.2bn).
Martin Bertogg, head of Cat Perils at Swiss Re, said: “The effects of climate change are manifesting in warmer temperatures, rising sea levels, more erratic rainfall patterns and greater weather extremes. Taken together with rapid urban development and accumulation of wealth in disaster-prone areas, secondary perils, such as winter storms, hail, floods or wildfires, lead to ever higher catastrophe losses.
“The experience so far in 2021 underscores the growing risks of these perils, exposing ever larger communities to extreme climate events. For example, winter storm Uri reached the loss magnitude that peak perils like hurricanes can wreak.”
He added: “The insurance industry needs to upscale its risk assessment capabilities for these lesser monitored perils to maintain and expand its contribution to financial resilience.“