In 2021, Nat CAT caused overall losses of $280bn, of which roughly $120bn were insured, said Munich Re in a report issued last month. Alongside 2005 and 2011, the year 2021 proved to be the second costliest ever for the insurance sector (record year 2017: $146bn, inflation-adjusted) – overall losses from Nat CAT were the fourth-highest to date (record year 2011: $355bn).
Hurricane Ida was the year’s costliest natural disaster, with overall losses of $65bn (insured losses of $36bn). The report noted that the US accounted for a very high share of Nat CAT losses in the past year (roughly $145bn, of which around $85bn were insured). Both overall and insured losses were significantly higher than in the two previous years (overall losses 2020: $100bn, 2019: $52bn; insured losses 2020: $67bn, 2019: $26bn).
In Europe, flash floods after extreme rainfall caused overall losses of $54bn, the costliest natural disaster on record in Germany. The insured portion was relatively low because of uninsured infrastructure losses and the limited insurance density for flooding. Insured losses in the region are estimated to have reached $13bn, of which $9.7bn are 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, the report said.
Munich Re chief climate and geo scientist and head of the climate solutions unit Ernst Rauch said, “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 US, 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.”
With overall economic losses of $50bn, of which $9bn was insured (insurance gap 83%), the losses in Asia-Pacific accounted for 18% of overall losses and 7% of insured losses. On a global level, around 57% of losses from Nat CATs in 2021 were not insured. This insurance gap has narrowed over the last few decades in industrialised countries, whereas in poorer countries it remains unchanged at over 90%. M