Swiss Re estimates global nat cat losses at $168 billion

Swiss Re estimates global annual insured losses from natural disasters topped $115 billion ($168.19 billion), well above the 10-year average of $81 billion ($118.46 billion) .

The reinsurer says 2022 marks the second year in a row that insured losses topped $100 billion, continuing a trend of average annual increases of 5-7% over the past decade.

Hurricane Ian was the costliest weather event, with losses estimated between $50 billion ($73.13 billion) and $65 billion ($95.06 billion).

Swiss Re predicts that the category four storm, which hit the United States in September, will be the second costliest insured loss on record, behind Hurricane Katrina in 2005.

The reinsurer also notes floods in Queensland and New South Wales, which are the costliest natural disaster in Australian history, resulting in losses of $4 billion ($5.85 billion).

“Extreme weather events led to high insured losses in 2022, underpinning rising risk and unfolding across all continents,” said Martin Bertogg, head of catastrophe risk at Swiss Re.

“Urban development, the accumulation of wealth in disaster-prone areas, inflation and climate change are key factors at play, turning extreme weather into ever-increasing natural disaster losses.”

Swiss Re estimates that insurers and reinsurers have covered around 45% of economic losses this year, which it says indicates a “significant protection gap across the world”.

The reinsurer credits the sector with managing natural catastrophe risk, but says this year’s figures show the “need to take a more forward-looking approach” to increasingly costly secondary risks such as floods and hail.