It’s only halfway through 2022, but so far natural disasters have caused losses of US$65 billion, with only slightly more than half of them insured, according to Munich Re.
In its latest report, Munich Re says the U.S. is once again the country with the highest weather-related losses, although extreme multi-day rainfall and severe flooding in Australia made up the main loss burden for the insurance industry of at least US$3.7 billion.
The U.S. accounted for almost half of overall losses in the first six months of 2022 and nearly two-thirds of insured losses, with a figure of US$19bn. A series of severe thunderstorms with tornadoes was the main cause of these losses. In the first half of the year, severe thunderstorms in the U.S. caused losses totalling US$22bn, with insured losses of US$17bn.
High insurance density absorbs economic shocks of natural disasters
A single thunderstorm front that produced tornadoes in early April in the U.S. destroyed assets worth more than US$3bn. In that storm, three-quarters of the assets were insured – a perfect example of how high insurance density can help absorb the economic shocks of natural disasters.
The greatest humanitarian tragedy was caused by a powerful earthquake in Afghanistan. About 1,200 people died when the quake, with a magnitude of 5.9, devastated the eastern part of the country.
Globally, about 4,300 people lost their lives in natural disasters in the first half of 2022.
Europe faced water scarcity and wildfires
In Europe, extreme heat and arid conditions in early summer led to water scarcity and wildfires, especially in Italy, Spain and Portugal. Munch Re said there was a massive glacier collapse in Italy presumably in part due to a large temperature increase in May and June.
“What used to be warm days will be hot days, what used to be hot days will be extremely hot days,” predicted Ernst Rauch, Chief Climate Scientist at Munich Re. “Droughts and wildfires are a direct consequence of this.”