In 2024, “natural” disasters – increasingly linked to climate change – have caused hundreds of billions of dollars in losses: the ten most costly events alone represented nearly 230 billion dollars. An amount undoubtedly underestimated, knowing that many damages were not insured. While current funding for the ecological transition remains largely insufficient given the scale of needs, in particular for developing countries, the first to be affected by climate change.
Three weeks after the passage of tropical cyclone Chido, Mayotte is still in distress. The year 2024 ended with the biggest natural disaster that the archipelago has experienced since 1934. The official report currently reports around forty deaths, around forty missing people and more than 5 600 injured. But in fact, the estimate of the missing is probably well below reality due to the lack of census in the slums of Mayotte.
Beyond the human toll, the cyclone would have generated a cost of 650 to 800 million euros for the CatNat regime estimated by the Central Reinsurance Fund (CCR) a few days after its passage. Around 10,000 insured homes and professionals were affected. Cyclone Chido concludes a year marked by numerous deadly and extraordinary climatic events. Cyclones, hurricanes, but also floods, droughts and heat waves which caused $258 billion in damage, according to data from the insurer AON summarized in a report published at the end of 2024 by Christian Aid.
The cost of natural disasters
Since 2016, the cost of damages from natural disasters has exceeded $250 billion. Even if these damages in 2024 are much lower than the estimates for 2023 ($351 billion), only 10 natural disasters generated a cost of $230 billion. Three-quarters of these losses were due to Atlantic hurricanes, floods in Central Europe and China, and a series of storms in North America.
In the United States, the insurer has listed more than $60 billion in damages between January and September 2024 for these successive storms. But the world’s leading power was also hit by several major hurricanes, Milton in October, Helene in September, which cost 60 billion and 55 billion dollars respectively. In China, deadly floods caused more than 15 billion dollars in damage from June to July, 5 billion in Brazil at the end of April, 4.45 billion in June in Germany and 4.22 billion in Valencia (Spain) last October. In Southeast Asia, Typhoon Yagi caused more than $12 billion in damage and killed at least 844 people. And the devastating fires in Los Angeles set the tone for 2025 (see box).
The need to adapt countries most vulnerable to natural disasters
“Economic impacts are generally higher in absolute terms in high-income countries, explains the Christian Aid report, the economic value of infrastructure and housing is generally higher, household spending is higher and a larger part of the property is covered by insurance – and therefore calculable – in financial terms.” On the contrary, as we saw in Mayotte, one of the poorest territories in France, or in South-East Asia, if material costs are lower – in particular because they are not insured or that construction is less expensive, this is often at the cost of more human losses. And it’s a double punishment. Because poverty, fragile housing and the lack of resources in general make these populations even more vulnerable to natural disasters.
Furthermore, these insurance data underestimate the real and long-term damage for the affected societies: the lack of data in poor regions adds to the human losses, the lack of resources to rebuild, the destruction of infrastructure. water, energy, health and industrial losses, or agricultural losses and those linked to ecosystems – soils, forests, mangroves and corals which were all hit in Mayotte by Cyclone Chido.
To reduce these vulnerabilities, the report calls on rich countries to drastically reduce their greenhouse gas emissions to limit the harmful consequences of climate change, which hit the most vulnerable countries first. He also recalls that the agreements signed at COP29 in Baku (Azerbaijan) to finance the ecological transition of emerging and developing countries by developed countries fall well short of needs. The 300 billion annual dollars released by historical polluters are insufficient. It would take at least 1,300 billion each year to achieve this.
Los Angeles fires, already one of California’s costliest disasters
The City of Angels is on fire and it’s already one of California’s costliest disasters. The first estimates from the American meteorological organization AccuWeather already predict nearly 150 billion dollars in damage. In fact, the destroyed homes in the celebrity neighborhoods (Pacific Palisade, Hollywood) are among the most expensive in the United States. And longer-term effects such as a drop in tourist activity, very lucrative for the region, are to be expected, in addition to an increase in health costs, according to AccuWeather cited by Bloomberg. If according to Standard and Poor’s, insurers should be able to cover insured assets (around $20 billion) due to good reserves, how long will this last?
California has suffered several megafires in recent years and the area is a hot spot of climate change which makes it a breeding ground for their multiplication in the coming years, encouraging insurance companies to already significantly reduce their presence in the Californian regions. It should therefore be up to the State, in particular via the FAIR plan, a public insurance system set up by California for those who can no longer find insurers, to partly pay the bill. But the imminent arrival of Donald Trump in power could reshuffle the cards. The latest report to date shows at least 16 deaths, numerous injuries, 180,000 evacuations as well as more than 10,000 buildings destroyed.
BH.
Illustration : Canva
