The COVID-19 pandemic has dominated headlines, but wildfires, hurricanes, and extreme weather have also taken their toll this year. With $83 billion in insured losses globally, 2020 is now the fifth-costliest year for insurers covering disasters since 1970, new estimates show.
The $83 billion in losses from natural and man-made disasters is up 32% from 2019 and lower only than the losses in 2018, 2005, 2011, and 2017, Swiss Re Institute said in a report Tuesday. The worst year during the 50-year period was 2017, when hurricanes fueled more than $154 billion in losses.
Natural disasters are only expected to get worse as the effects of climate change grow more intense, the research arm of the reinsurer Swiss Re Group said in its report. Through November, this year has been the second-hottest on record, according to the National Oceanic and Atmospheric Administration. Rising temperatures coupled with increased humidity may lead to more extreme weather conditions that favor wildfires, storm surges, and floods, according to Swiss Re.
”While COVID-19 has an expiry date, climate change does not, and failure to 'green' the global economic recovery now will increase costs for society in future,” Jerome Jean Haegeli, chief economist for Swiss Re Group, said in the report.
Natural disasters caused $76 billion in damage—up 40% from 2019. Seventy percent of that was due to events such as wildfires, thunderstorms with tornadoes, floods, and hail, and another $20 billion stemmed from hurricanes in the North Atlantic.
The 2020 wildfire season is expected to be the third costliest on record behind 2018 and 2017, with insured damages still being tallied but estimated in the $7 billion to $13 billion range by risk modeler RMS.
The North Atlantic hurricane season, which ended Nov. 30, produced a record 30 named storms, but the resulting $20 billion in insured losses was moderate compared to losses in 2005 and 2017, when Hurricanes Katrina and Harvey ravaged the Gulf Coast.