Violent U.S. storms have racked up heavy losses for insurers in 2023
(Bloomberg) –Even before they pummeled the East Coast on Monday and left nearly half a million people without power, thunderstorms have demonstrated vast destructive power in the US this year.
Severe thunderstorms — the kind that come with lightning, hail and sharp changes in temperature — in the US accounted for nearly 70% of all insured global natural catastrophe losses in the first half of 2023, according to an annual midyear report from Swiss Re, the international reinsurance giant.
Total global insured losses from natural catastrophes were about $50 billion from January through June. That’s the second highest since 2011, according to the report made available in advance exclusively to Bloomberg News.
Thunderstorms have historically trailed hurricanes and earthquakes when it comes to major insurance claims from natural disasters, and therefore are considered secondary perils. But the storms are becoming more frequent due to manmade climate change.
Read More: Storms, Floods and Fires Caused $260 Billion in Losses in 2022
“The losses caused by thunderstorms in the first half of 2023 were mainly dominated by hail damage,” said Erdem Karaca, head of Catastrophe Perils Americas at Swiss Re. “This year’s activity has been higher than usual, but losses from secondary perils in general have been trending higher in recent years.”
In the US, a series of severe thunderstorms caused losses of $34 billion in the first half of the year. Ten events have each caused losses of $1 billion or more so far in 2023. Over the previous decade, such high-loss events averaged six per year.
Karaca says worsening weather due to climate change and population growth in storm-prone areas is an expensive combination. “For example, the population in Texas increased by close to 40% in the last 20 years, which is more than double the increase across the US,” he said.
Although the US accounted for the lion’s share of insured losses, other parts of the globe experienced record destruction. New Zealand was hit by flooding and a cyclone just two weeks apart in early 2023. Both became the two costliest weather-related insured-loss events in the country since 1970, with combined insured losses estimated at $2.3 billion.
Heavy rainfalls in northern Italy’s Emilia-Romagna region in mid-May led to extensive flooding causing $10 billion in damages. Only about $600 million of that amount was insured.
To contact the author of this story:
Leslie Kaufman in New York at lkaufman27@bloomberg.net
