Natural catastrophes hit insurers hard

Natural catastrophes cost the insurance industry $40 billion (CHF37 billion) in the first half of 2021, according to preliminary figures published by reinsurer Swiss Re on Thursday.  

A summer storm caused devastation and flooding in many parts of Europe this year, with Germany particularly hard hit. Copyright 2021 The Associated Press. All Rights Reserved

Economic losses caused by natural and human-caused disasters have been on the upswing for years, a separate survey by German reinsurer Munich Re revealed. They caused global economic losses to the tune of $77 billion, with the insurance industry responsible for covering $42 billion. 

Swiss Re notes that this is the second-highest loss value ever recorded during the first six months of a year and is above the ten-year average of $33 billion. In the wake of climate change, so-called secondary natural hazards such as winter storms, hail, floods and forest fires are becoming an even greater burden. 

“The experience so far in 2021 underscores the increasing danger posed by these hazards, as posed by these risks, as larger and larger segments of society are exposed to extreme weather events,” said Martin Bertogg, head of catastrophe losses at Swiss Re. 

Bracing for second half 

In the United States winter storm Uri alone caused an estimated $15 billion in insurance losses. German insurers are bracing for the second half of the year when they will likely need to absorb the €5.5. billion (CHF6 billion) in losses caused by summer floods.   

Switzerland also experienced heavy rainfall and flooding this summer, causing damage estimated at CHF450 million.  

Across the Atlantic the biggest threat is hurricane season, which is yet to come. 

The costliest natural disaster of all time is the Tohoku earthquake, which occurred in Japan on March 11, 2011, according to Munich Re. In terms of insured losses, the costliest natural disaster to date is Hurricane Katrina, which hit New Orleans in summer 2005.