Unprecedented levels of damage from storms this year is upending US towns and the insurance industry

by Ethan Kim
0 comment

Unprecedented levels of financial damage caused by storms this year have disrupted both U.S. towns and the insurance sector. The first half of this year saw a series of intense thunderstorms in the U.S., resulting in insured losses amounting to $34 billion. This rapid and extensive financial impact is unparalleled and is attributed to the escalating frequency and severity of severe weather events due to climate change, as stated by Swiss Re Group.

Approximately 70% of the total global catastrophic damages, totaling $50 billion, were incurred from convective storms in the U.S., characterized by features such as hail, lightning, heavy rainfall, and strong winds. These statistics were released by the reinsurer, with their report including data on earthquakes in Turkey and Syria.

Remarkably, the U.S. experienced 10 particularly damaging storms that each caused losses of $1 billion or more, a figure nearly twice the average of the previous decade. Texas suffered the most significant impact among the states.

Swiss Re Group Chief Economist Jérôme Jean Haegeli emphasized that the manifestations of climate change are already apparent in events like heatwaves, droughts, floods, and heavy precipitation. Beyond climate change, urban expansion into vulnerable coastal and riverine areas along with increased development in wilderness regions are resulting in a challenging mix of high-value assets exposed to heightened risks.

The second half of the year also witnessed prominent meteorological incidents, including heatwaves in the U.S., northwestern China, and southern Europe, as well as wildfires in various locations like Greek islands, Italy, and Algeria. The losses and insurance claims from these events are still being calculated, according to Swiss Re.

This year’s first-half figures align with a recent report from Munich Re, another major reinsurer. This report indicated that the series of thunderstorms that struck Texas in June constituted the most expensive single event in the U.S. for the year. The losses from these storms alone are estimated at around $8.4 billion.

Given the increasing intensity and frequency of devastating storms, Marcus Winter, CEO, North America at Munich Reinsurance America, emphasized the urgent need to prepare communities for the physical and financial risks posed by climate-related weather events.

Despite years of rising premiums, the insurance industry has faced disruptions due to the growing prevalence of extreme weather events. Some insurers have even withdrawn from states like Florida and California that are severely impacted by these events. This retreat is occurring despite efforts by lawmakers to stabilize the insurance market in the face of mounting challenges posed by climate change.

Frequently Asked Questions (FAQs) about climate-intensified

What led to the unprecedented financial damage from storms in the US this year?

Waves of severe thunderstorms in the first half of the year caused $34 billion in insured losses, attributed to the intensifying impact of climate change on the frequency and severity of meteorological events.

What type of storms caused the majority of global catastrophic damages this year?

Convective storms in the US, characterized by hail, lightning, heavy rain, and strong winds, accounted for nearly 70% of the $50 billion in global catastrophic damages this year.

How many storms caused damages of $1 billion or more in the US?

There were 10 storms in the US that resulted in damages of $1 billion or more, which is almost double the average recorded over the past decade.

Which state in the US was most severely affected by the storms?

Texas was the state in the US that experienced the most severe impact from the storms.

How are insurance companies responding to the increasing frequency of extreme weather events?

Despite rising premiums, some insurance companies are retreating from states like Florida and California due to the growing challenges posed by climate-intensified events.

What is the significance of the Munich Re report?

The Munich Re report highlighted that the series of thunderstorms in Texas in June was the most expensive single event in the US for the year, with estimated losses of around $8.4 billion.

How are communities being urged to prepare for climate-related weather events?

Experts stress the importance of immediate action to prepare communities for both the physical and financial risks of future climate-related weather events.

How has climate change impacted the insurance market?

Climate change has led to an increasing frequency of extreme weather events, disrupting the insurance industry and prompting insurers to withdraw from high-risk areas.

What other meteorological events occurred in the second half of the year?

The second half of the year saw events like heatwaves in various regions and wildfires in locations such as Greek islands, Italy, and Algeria.

Why has the insurance market in Florida faced challenges since 1992?

Hurricane Andrew’s devastation in 1992 left the insurance market in Florida struggling to maintain stability due to increased risks from climate-intensified hurricanes and rainstorms.

More about climate-intensified

You may also like

Leave a Comment

BNB – Big Big News is a news portal that offers the latest news from around the world. BNB – Big Big News focuses on providing readers with the most up-to-date information from the U.S. and abroad, covering a wide range of topics, including politics, sports, entertainment, business, health, and more.

Editors' Picks

Latest News