Insured losses from severe thunderstorms reached a new all-time high in 2023, according to the Swiss Re Institute. They say damages will exceed USD $60-billion (all figures in U.S. dollars) in 2023, thanks to the high frequency of such storms and other natural catastrophes.

“High frequency of low single-digit billion-dollar events adds up to large insured losses that will exceed the $100-billion threshold for a fourth consecutive year,” they write. “The re/insurance industry covered roughly 40 per cent of the economic losses ($269-billion) this year, indicating a large protection gap across the world.” 

They add that natural catastrophes will again break several loss records in 2023, with severe convective thunderstorms being the main contributor. The institute says this is the first time that severe thunderstorms have caused this level of loss for the industry.

“The cumulative effect of frequent, low-loss events, along with increasing property values and repair costs, has a big impact on an insurer’s profitability over a longer period,” states Swiss Re’s group chief economist, Jérôme Jean Haegeli. “The high frequency of severe thunderstorms since 2023 has been an earnings’ test for the primary insurance industry.” 

Although losses from the North Atlantic hurricane season remain below average in 2023, year-to-date, they say losses from severe thunderstorms have steadily increased by seven per cent annually in the last 30 years. “2023 marks an increase of almost 90 per cent compared to the previous five-year average,” they state.