The year 2024 is set to be a landmark one in terms of insured losses, as it marks the fifth consecutive year for losses to exceed the $100 billion mark. According to the Swiss Re Institute, global temperatures averaging 1.54°C above pre-industrial levels have contributed to this trend. The increase in insured losses, expected to rise by 5% to 7% annually, is primarily due to urbanization and economic growth, which boost asset values and rebuilding costs. However, climate change is exacerbating the frequency and severity of natural catastrophes, especially in Europe and the US.
In Europe, flood risks have reached alarming levels. Insured losses from floods have hit the second-highest level ever, with Europe alone accounting for around $10 billion in losses this year. Floods in various forms, such as pluvial and fluvial, have wreaked havoc. In April, heavy rainfall flooded the Gulf region, affecting Dubai’s airport. September saw Storm Boris cause widespread flooding in Central Europe, and in October, Spain endured flash floods and hailstorms. These events have been intensified by climate change, as seen with the Vb low system that combines warm and cold air.
The US has also been severely impacted, with two major hurricanes and a high frequency of severe thunderstorms. Severe convective storms in the US are expected to contribute over $51 billion to global insured losses in 2024, the second-highest total after 2023. Swiss Re’s experts, like Jérôme Jean Haegeli, stress the importance of adaptation measures and sufficient insurance coverage. With economic development driving up asset values in vulnerable areas, the protection gaps could remain significant. The need to prioritize investment in mitigation and adaptation strategies is crucial to build financial resilience against such escalating risks.
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