USD83 bn insured cat losses estimated

Insurance industry losses from natural catastrophes and man-made disasters globally amounted to USD83 billion in 2020, according to Swiss Re Institute’s preliminary sigma estimates.

This makes it the fifth-costliest year for the industry since 1970. Losses were driven by a record number of severe convective storms (thunderstorms with tornadoes, floods and hail) and wildfires in the US. These and other secondary peril events around the world accounted for 70 percent of the USD76 billion insured losses from natural catastrophes. A very active North Atlantic hurricane season triggered an additional USD20 billion of insurance claims, moderate compared to the record seasons of 2005 and 2017. The insurance industry covered 45 percent of global economic losses in 2020, above the ten-year-average of 37 percent.

Climate change is expected to exacerbate secondary peril events as more humid air and rising temperatures create more extreme weather conditions. These favour the onset and spread of events such as wildfires, storm surges and floods.