Insurance Giant Tallies 2021 Losses

January 15, 2022

Worth going to the link to see one of the world’s largest reinsurers summary of global damages from climate events in 2021.

Munich Re:

• In 2021, natural disasters caused overall losses of US$ 280bn, of which roughly US$ 120bn were insured

• Alongside 2005 and 2011, the year 2021 proved to be the second-costliest ever for the insurance sector (record year 2017: US$ 146bn, inflation-adjusted) – overall losses from natural disasters were the fourth-highest to date (record year 2011: US$ 355bn)

• Hurricane Ida was the year’s costliest natural disaster, with overall losses of US$ 65bn (insured losses of US$ 36bn)

• In Europe, flash floods after extreme rainfall caused losses of US$ 54bn (€46bn) – the costliest natural disaster on record in Germany 

• Many of the weather catastrophes fit in with the expected consequences of climate change, making greater loss preparedness and climate protection a matter of urgency

Ernst Rauch, Chief Climate and Geo Scientist at Munich Re, and head of the Climate Solutions Unit, commented as follows on the figures:

“The 2021 disaster statistics are striking because some of the extreme weather events are of the kind that are likely to become more frequent or more severe as a result of climate change. Among these are severe storms in the USA, including in the winter half-year, or heavy rain followed by floods in Europe. For hurricanes, scientists anticipate that the proportion of severe storms and of storms with extreme rainfall will increase because of climate change. Even though events cannot automatically be attributed to climate change, analysis of the changes over decades provides plausible indications of a connection with the warming of the atmosphere and the oceans. Adapting to increasing risks due to climate change will be a challenge.”

On a global level, around 57% of losses from natural catastrophes in 2021 were not insured. Those affected must bear the financial losses themselves, or rely on aid. This insurance gap has declined over the last few decades in industrialised countries, whereas in poorer countries it remains unchanged at over 90%.  

In industrialised countries, the proportion of insured losses depends on the particular natural hazard concerned. For example, in the USA and Europe, insurance density is much lower for floods than for storms. Some infrastructure in the USA is insured, while this is seldom the case in Europe.

“Greater insurance density can help people and countries to better cope with the financial consequences of a disaster and help them return to a normal life. Developing concepts in partnership with governments (public-private partnerships) certainly makes sense,” explains Ernst Rauch.

Munich Re is not a climate-come-lately me-too player. Below, an image from a 1973 warning about the impacts of climate.

I’ve continued to follow the insurance story, because it’s probably the earliest warning pocketbook impact that a lot of otherwise oblivious Americans will feel.

One Response to “Insurance Giant Tallies 2021 Losses”

  1. rhymeswithgoalie Says:

    As pointed out elsewhere (possibly an earlier climatecrocks blog post or followup comment), besides the obvious participation by insurance companies in the setting of appropriate premiums for modern risk levels, insurance companies work by making more money out of investing premiums than they lose to payouts in the long run. Taking their heaps of money out of fossil fuels and shifting it to new grid technology* may be even a greater contribution on their part than their role of “communicating” the real cost of climate change to the world.

    I hadn’t even thought of their role in normalizing the insuring of new tech such that it is easier to adapt to the mainstream investment market.

    Also, I think he has a cute accent. :-þ

    ____________
    *Even if they didn’t make a special effort to invest in RE funds, just taking the money away from the FF companies is a major win.


Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: