Insured tropical cyclone losses significantly higher than average in 2024: Munich Re
According to global reinsurance giant Munich Re, both economic and insurance market losses from tropical cyclone activity around the globe in 2024 are “significantly higher” than averages, with the insured total for the year estimated at $51 billion.
Tropical cyclones in the North Atlantic (hurricanes) and in the Northwest Pacific (typhoons) have driven economic losses of approximately US $133 billion this year, much higher than the $89.2 billion 10-year and $62.6 billion 30-year averages.
For the global insurance and reinsurance market, these catastrophe events resulted in losses estimated at $51 billion in 2024, Munich Re explained, again well above the the $35.1 billion 10-year and $23.7 billion 30-year average figures.
In fact, tropical cyclone losses in 2024 rank second only to those experienced in 2017, and Munich Re also confirmed that insured catastrophe losses for the year will exceed $100 billion already.
The severe North Atlantic hurricane season was the main contributor, accounting for $110 billion of economic losses in North America and insured losses currently estimated around $49 billion.
The 10-year average for insured North Atlantic hurricane losses is $30.1 billion, while the 30-year average is $20.9 billion, Munich Re explained.
Thomas Blunck, Member of the Board of Management at the global reinsurance company commented, “While the total number of tropical cyclones this season was unremarkable, what stands out is the rapid intensification of severe storms, characterised by extreme rainfall.
“This phenomenon is increasingly linked to the impacts of climate change. Tragically, Hurricane Helene claimed hundreds of lives in the United States. Strengthening prevention and resilience measures is crucial to reducing the loss of life in future storms.”
Munich Re further stated that, “Extremely high sea surface temperatures fuelled the storms’ intensity – another stark reminder of climate change’s impact.”
On the other side of the globe, the Northwest Pacific typhoon season is estimated to have resulted in around $22 billion of economic losses to-date, but the insurance market share is just $2 billion, once again demonstrating a significant protection gap.
For typhoons, insured losses are actually tracking below the annual averages, while the economic costs are slightly above.
On an economic basis, hurricane Helene was the most costly tropical cyclone event of 2024, at an estimated $56 billion, with hurricane Milton next at $38 billion.
But, the insurance and reinsurance market share reverses the order, with Helene seen as a $16 billion insured loss including the NFIP, while Milton is estimated at $25 billion, again including the cost of NFIP claims.
The costliest typhoon in Asia, Typhoon Yagi, was third-costliest cyclone of the season worldwide in economic loss terms, at $14 billion. But only an estimated $1 billion was insured, again reflecting the lack of insurance penetration in the regions affected (the Philippines, Hainan, the Chinese province of Guangdong, and Vietnam).
Munich Re said that the effects of climate change are becoming more apparent, with the El Niño/Southern Oscillation (ENSO) influencing the number of storms that occur.
In addition, high sea temperatures are a factor in storm intensification, Munich Re said, adding, “New studies continue to show the clear influence of this climate change impact on tropical cyclone intensity and the amount of rainfall storms can produce,” while in addition, “Researchers also see evidence of the influence of climate change on the trend of cyclones to more frequently intensify explosively.”
