Insurers are facing $135 billion of losses after extreme weather events around the world this year
Associated Press
- Insurers are on track to lose $135 billion this year amid global climate disasters, a new report finds.
- That's a 17% increase from 2023 and marks the fifth consecutive year of losses over $100 billion.
- The researchers point to storms in the US and flooding in Europe and the Middle East as primary causes.
A new report finds that a year of climate disasters will pose steep losses for the insurance industry in 2024.
The report from the Swiss Re Institute says insurers will lose $135 billion this year, a 17% increase from 2023, after a slew of extreme weather events rocked the world in recent months.
The report says that the US is responsible for over two-thirds of those losses, and damage from Hurricanes Helene and Milton alone will likely cost almost $50 billion.
Severe thunderstorms worldwide are expected to add more than $51 billion globally for 2024, the second-highest loss for that type of climate catastrophe after a record high of around $70 billion in 2023.
Rising flood risks also incurred significant damage, with major floods in Europe and the Middle East amounting to $13 billion in insured losses.
The steep losses resulting from extreme weather come as 2024 is on track to be the hottest year on record, with the average temperature coming in 1.54°C above the pre-industrial average, the report says.
2024 also mark the fifth consecutive year that insured losses from natural catastrophes have surpassed $100 billion, the researchers said.
"Much of this increasing loss burden results from value concentration in urban areas, economic growth, and increasing rebuilding costs. By favouring the conditions leading to many of this year's catastrophes, climate change is also playing an increasing role," Balz Grollimund, Swiss Re's head of catastrophe perils, wrote.
The increased losses are already leading to higher insurance premiums for homeowners in the US, up 33% from 2020 to 2023, a June study found.
That trend is uneven depending on a state's natural disaster risk, though, and will likely continue having a greater impact on riskier states like Florida, which has been heavily impacted by storms in recent years.