The insurance industry will pay record claims of US$135 billion from last year’s spate of worldwide natural catastrophes, according to a report published by Munich Re.
Overall economic losses (including uninsured losses) in 2017 amounted to some $330bn for all types of natural disaster globally, the financial firm said, close to double the $175bn in mayhem inflicted the previous year.
Munich Re said this is the second-highest figure ever recorded for natural disasters, which was only surpassed in 2011, when the Tohoku earthquake in Japan and floods in Thailand contributed to overall losses of US$354 billion in today’s dollars.
The overall loss figure is almost double the 10-year, inflation-adjusted average of US$170 billion, said Munich Re, noting that insured losses were almost three times higher than the average of US$49 billion.
For its report, Munich Re tracked a total of 710 natural catastrophes, which was significantly higher than the average of 605.
The year saw the worst hurricane season on record and major monsoon flooding, the company said, warning that as climate change intensifies it expects “extreme weather to occur more often in the future”.
But casualty figures did not rise in step with property damage, as around 10,000 people lost their lives — around 30% more than the previous year’s toll. That was a fraction of the 10-year average of 60,000 killed annually in catastrophes.
Some 2,700 people died in severe monsoons in South Asia, with Nepal and Himalayan regions of India among the worst affected.
Meanwhile, some 50% of the global financial pain fell on the United States, with regions like Texas and Puerto Rico pummelled by hurricanes Harvey, Irma and Maria, and wildfires raging in California.
When taking into account the cash toll exacted from the rest of North America – including Mexico, where devastating earthquakes claimed 369 lives – the continent suffered 83% of worldwide financial losses.
Munich Re labelled 2017 as “the costliest hurricane season on record”, with some $215bn of damage from a series of storms.
The havoc was “a foretaste of what is to come,” said board member Torsten Jeworrek. “Even though individual events cannot be directly traced to climate change, our experts expect such extreme weather to occur more often in the future.”
The insurers also pointed to a weak harvest in Europe, where farmers lost up to 50% of their crops after an April frost damaged plants that had flourished in a warm spring, as a hint of the risks as climate change progresses.
Only 41% of the losses recorded in 2017 were insured, Munich Re said, suggesting that low levels of coverage in South Asia in particular “contributed to the humanitarian catastrophe” of the monsoon.