Climate-related extreme weather events like the hurricane trio of Harvey, Irma and Maria or the severe flooding in South Asia have cost the insurance industry a record amount in 2017.
The insurance industry is reeling from last year’s natural catastrophes. The hurricane trio that raged across the Gulf of Mexico, massive flooding in South Asia, Mexico’s severe earthquake and other disasters are expected to cost the insurance industry a record $135 billion – more than ever before.
Torsten Jeworrek, a board member at the global insurance firm Munich Re, called 2017 “a foretaste of what is to come”, adding that “even though individual events cannot be directly traced to climate change, our experts expect such extreme weather to occur more often in future”.
Overall losses – i.e. including uninsured losses – amounted to $330 billion, the second highest on record. Losses from weather-related natural catastrophes set a new record.
The U.S. share of losses in 2017 was even larger than usual: 50 per cent as compared to the long-term average of 32 per cent. The hurricane trio of Harvey, Irma and Maria, which devastated the Caribbean and Gulf of Mexico, were responsible for much of these losses.
Stronger building codes in Florida helped reduce losses and protect lives during the past hurricane season, said Tony Kuczinski, president and CEO of Munich Re in the U.S., but he warned of a continued “insurance gap” in which the vast majority of home and small business owners do not purchase flood insurance.
Asia was hard hit by natural disasters following an extremely severe monsoon season that lasted four weeks longer than normal in 2017. Three-quarters of the territory in some parts of Nepal and India was under water and some 2,700 people lost their lives. According to Munich Re, only 8 per cent of the $3.5 billion in total losses was insured, contributing even further to the humanitarian catastrophe.
Europe also experienced its share of climate-related losses in 2017. Unusually low temperatures in April caused billions in damage to European farmers whose crops had already grown in an otherwise warm spring, with harvests up to 50 per cent smaller than usual in some regions. Munich Re warns that such events could occur more frequently in the future as a result of climate change.
Image credit: NLRC via IFRC