Natural catastrophes in 2022 cost 275,000 million dollars

2022 was the second year in a row that insured losses from natural impacts exceeded $100 billion


Natural catastrophes caused global economic losses of 275,000 million dollars (about 255,000 million euros) in 2022, of which 45% was covered by insurance, according to a report by Swiss Re, which highlights the trend of increasing insured losses. between 5 and 7% per year in the last 30 years.


This is reflected in the document published this Wednesday by the reinsurer, which highlights among the most costly events Hurricane Ian in Florida (USA), the hail in France that achieved “record losses”, the floods in Australia and South Africa, the winter storms in Europe and the US and droughts in Europe, China and America.


2022 was the second consecutive year that insured losses from natural impacts exceeded $100 billion, and the fourth with the highest total losses (not necessarily insured), according to the document.


The magnitude of these economic impacts is due especially to the fact that the exposure of assets to natural risks has grown, a vulnerability accentuated by inflation, says the head of Catastrophic Risks at Swiss Re, Martin Bertogg.


The increase in losses, which is intensified by the concentration of value in vulnerable areas, represents, according to Bertogg, “a wake-up call to reflect this exposure factor even more carefully in risk assessments, while continuing to help society so that it is better prepared”.


“Property catastrophe reinsurance rates rose to 20-year highs at renewals in January 2023, continuing a trajectory that began in 2018,” the report reads.


Experts predict that interest rates will continue to rise, since “the economic storm has not ended” and the situation of natural catastrophes -which translates into the population insuring more goods-, linked to inflationary pressure and the consequent increase in the cost of These imply higher financing costs.


As a result, “insurance capacity providers are likely to continue to be more cautious when deploying capital for various reasons, including risk assessment and loss experience,” the reinsurer points out.


“As exposure increases and risk appetite declines, the price escalation is likely to continue, with retentions rising and conditions tightening further,” says Swiss Re chief economist Jérôme Jean Haegeli. The main cause of losses in 2022 was Hurricane Ian, the costliest loss of the year and, after Katrina (2005), the second costliest natural catastrophe in insured losses according to the sigma report.


Even as a storm, once it reached the southern state of Florida -accustomed to this type of extreme phenomena- with category 4, it caused estimated insured losses of between 50,000 and 65,000 million dollars. In Europe, the storms that struck the northwest in February 2022 cost more than $4,000 in combined insured losses, almost double the average of the previous ten years.


Meanwhile, France registered the largest annual loss due to hailstorms, which caused losses valued at 5,000 million dollars. Last year’s floods globally were also more costly than average: never before had floods led to as high insured losses as those suffered by eastern Australia between February and March 2022, valued at $4.3 billion, floods that In turn, they accounted for the largest natural catastrophe loss ever recorded in the oceanic country.


The lack of rain due to “weather variability and abnormal atmospheric circulation conditions” was also reflected in the accounts: in Brazil, crops affected by severe droughts and heat waves cost $1 billion in insured losses.