Natural disasters, aggravated by climate change, led to exceptionally high economic losses last year, reinsurer Munich Re said on Thursday, according to which the global community must act to “strengthen the resilience” of vulnerable countries.
The German group’s assessment is very close to that presented in December by Swiss Re, the other world leader in reinsurance.
For reinsurers, 2024 ranks 3rd among the most expensive years since 1980, estimates Munich Re, with insured losses amounting to 140 billion dollars, when Swiss Re had mentioned 135 billion.
Total economic losses stood at $320 billion, compared to $268 billion in 2023, calculates the Bavarian group, an increase of 19%, where Swiss Re had announced an amount of $310 billion.
“Our planet’s weather machine is shifting into high gear,” Tobias Grimm, the group’s chief climatologist, said in the study. The year 2024 is expected to be the warmest globally.
“The global community must finally act and find ways to strengthen the resilience of countries that are particularly threatened,” he observes, while “people in countries that do not have insurance protection or public support to help them get back on their feet” pay a particularly high price.
The loss amounts far exceed the inflation-adjusted averages of the last 10 and 30 years.
The two costliest years for the insurance industry were 2005, marked by Hurricane Katrina in New Orleans, and 2017, with three major hurricanes, Harvey, Irma and Maria.
The year 2024 was marked by a “combination of rare large disasters, such as earthquakes and hurricanes, and more frequent events, such as hail, localized flooding and wildfires”, explained to AFP Tobias Grimm.
“These phenomena have particularly increased in intensity and frequency over the years,” he adds.
Tropical cyclones alone contributed to total losses of $135 billion and insured losses of $52 billion.
The majority of these losses came from powerful hurricanes in the United States and in particular hurricanes Helen and Milton which hit Florida at the end of September and the beginning of October, causing between them 41 billion dollars in insured losses.
In Europe, the floods in Valencia, Spain, caused losses of 11 billion dollars, including 4.2 billion insured.
“A flood attribution study in Spain showed that climate change has doubled the likelihood of experiencing such rainfall,” according to Mr. Grimm.
Due to warmer sea water, more moisture evaporates, clouds become heavier and shed more rain. This increases the risk of flooding.
Floods are therefore “not only a threat near rivers, but almost everywhere, even in regions better known for their drought”, underlines the expert, who cites the example of Dubai airport, under water in April .
Cyclone Chido, which devastated Mayotte in December, would have been less powerful without global warming, according to a preliminary study.
Preventing climate extremes is working better, saving more lives than ever before.
The human toll of natural disasters in 2024, however, remains heavy, with some 11,000 people having lost their lives.
The heaviest death toll is linked to Typhoon Yagi, which devastated Southeast Asia in September, causing 851 deaths.
“In developing countries, lack of infrastructure and inadequate building regulations amplify human and material losses,” notes Mr. Grimm.
Another problem is the lack of insurance coverage. In Mayotte, only 6% of individuals have home insurance.
So-called “parametric” insurance can help bridge the insurance gap.
“Defined parameters, such as wind strength, enable rapid compensation after a storm, without the need to prove individual damage,” explains Grimm. These solutions are already used by island countries or African countries.
