Bloomberg Intelligence predicts third straight year of $100bn nat cat insured losses
A new report from Bloomberg Intelligence says that nat cat insured losses are on course to top $100bn for the third year in a row, with much of the claims coming from secondary perils such as floods, hail and wildfires.
The report says that all of these secondary perils are becoming more frequent as global temperatures rise.
Charles Graham, senior insurance analyst at Bloomberg Intelligence, said: “Munich Re puts total global insured costs of natural-catastrophe events in H1 at $43bn and Swiss Re at $50bn, so it seems certain that 2023 claims for weather-related incidents will probably exceed $100bn for the third year in a row.”
Kevin Ryan, senior insurance analyst at Bloomberg Intelligence, added: “This year is on track to be the third sequential year when insured losses from weather-related events top $100bn. Swiss Re anticipates that the insured cost of natural-catastrophe claims has increased at an annual growth rate of 5-7% since 1992. Mounting inflation looks likely to see that pace accelerate. Driving the longer-term trend is a combination of greater loss severity caused by rising property values, continued urban expansion and economic growth, and the increasing intensity of weather events linked to climate change.”
Bloomberg said that weather losses dominated insured natural-catastrophe claims in the first half of this year, contributing to the second-highest figure on an inflation-adjusted basis since H1 2011.
“More than two-thirds of H1 insured losses from natural catastrophes were as a result of severe thunderstorms in the US, which brought floods, hail and tornadoes. Climate change facilitates the formation of convective storms, since higher temperatures result in greater water evaporation and increased humidity at ground level. Record temperatures have also sparked numerous wildfires,” said Graham.
The Bloomberg report says that nat cat insured losses of $125bn last year compare with an average cost of $81bn over the past ten years and $110bn over the last five.
Meanwhile, insured losses from wildfires have doubled over the past 30 years.