Summer storms drive Swiss insurers’ largest payout since 2005

Globally, economic losses caused by natural disasters have been rising for years. This summer was tough for Switzerland but many other countries also suffered extreme weather events. Keystone / Anthony Anex

The violent storms that hit Switzerland this summer will cost the country’s insurance sector CHF2.2 billion ($2.4 billion), according to the Swiss Insurance Association (SIA). This represents the second largest payout since 2005. 

Natural disasters came with particularly high price tag this summer. Switzerland endured hail, floods and storms between mid-June and July. The centre of the country was particularly badly hit. 

But on Thursday the association said that preventive measures taken in recent years, particularly against flooding, had helped keep costs in check. Only 2005 proved more expensive for the sector and that was largely due to damages relating to flooding and high water in what Switzerland remembers as the “flood of the century”.

Since then, authorities have built facilities around rivers and lakes to drain or collect flood water.

Approximately half of the 2021 costs will be borne by the 19 cantonal insurance institutions (ECA), with the remainder covered by private companies, the association said.

Two-tier protection system

The association said the Swiss system of double coverage for damage caused by natural disasters was an advantage.

The ECA – which is indispensable in most cantons – covers damage to buildings caused by floods and storms. At the same time, private insurers offer solutions to protect personal effects and vehicles.

Worldwide, natural catastrophes cost the insurance industry $40 billion (CHF37 billion) in the first half of 2021, according to reinsurer Swiss Re.