The year 2024, marked by an average global temperature 1.54°C above pre-industrial levels, is on track to become the hottest year recorded, according to the Swiss Re Institute.
The warming climate has contributed to an increase in natural catastrophes, with global insured losses surpassing $135 billion as of current estimates. The United States and Europe have borne the brunt of these losses, driven by hurricanes, severe thunderstorms, and significant flooding events.
“For the fifth consecutive year, insured losses from natural catastrophes break the $100-billion mark,” said Balz Grollimund (pictured above), Swiss Re's head of catastrophe perils.
He attributed much of the increase to value concentration in urban areas, economic growth, and rising rebuilding costs. Grollimund also pointed to the role of climate change in creating favorable conditions for many of the year’s catastrophic events, stressing the importance of investing in mitigation and adaptation measures.
In the United States, two major hurricanes – Helene and Milton – made landfall on Florida’s coast in September and October, contributing to the country’s share of at least two-thirds of global insured losses.
Combined insured losses from the hurricanes are expected to remain below $50 billion, while severe convective storms (SCS) in the US added more than $51 billion to global losses, making 2024 the second-highest year for SCS losses after 2023’s $70 billion.
Flooding has emerged as one of the costliest perils in 2024, with insured losses estimated at nearly $13 billion globally. Europe experienced its second-costliest year for floods, with approximately $10 billion in insured losses.
Events such as Storm Boris in September caused significant damage across Central Europe, affecting countries including the Czech Republic, Poland, and Austria. The storm mixed Arctic air with unusually warm air from the south, fueled by record-high temperatures in the Mediterranean, intensifying precipitation.
The United Arab Emirates also faced severe flooding in April, disrupting operations at Dubai’s international airport. In October, heavy rainfall and flash floods in Spain caused extensive damage, particularly in Valencia, Castilla-La Mancha, Andalusia, and the Balearic Islands. Some areas received a year’s worth of precipitation in less than eight hours, overwhelming drainage systems and steep terrain.
Swiss Re highlighted the variety of flooding types that can affect urban and rural areas. Fluvial floods, which occur after heavy rainfall, typically impact areas near rivers and can last for extended periods.
Pluvial floods, caused by intense rainfall over short periods, often overwhelm urban drainage systems and lead to flash floods. Coastal areas also face storm surge flooding, often linked to tropical cyclones.
Jérôme Jean Haegeli, Swiss Re’s group chief economist, noted that economic development continues to be the primary driver of rising insured losses from floods and other natural perils. He emphasized that with higher asset values in high-risk areas and intensifying extreme weather events due to climate change, insured losses are expected to increase annually by 5–7%.
Haegeli also underscored the importance of adaptation measures, stating that protective infrastructure like dykes, dams, and flood gates can be up to ten times more cost-effective than rebuilding after disasters.
The institute called for greater investment in resilience, emphasizing that adaptation measures and adequate insurance coverage are critical to financial stability in the face of natural catastrophes.
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