Munich Re's report on the first half of 2023 reveals a continuation of high catastrophe losses, although slightly lower than the previous year.
Overall losses amounted to $110 billion, with insured losses at $43 billion. These figures still exceeded the 10-year average for the same period, highlighting the persistent challenges faced by the insurance industry.
The earthquake in Turkey and Syria stood out as the most devastating natural disaster during this period. Occurring in February, a series of powerful tremors caused widespread destruction, resulting in the loss of around 58,000 lives, Munich Re reported. The total losses from this earthquake reached approximately $40 billion, with only a small portion insured, illustrating the insurance gap prevalent in various countries for natural hazards.
In the US, severe thunderstorms wreaked havoc, leading to over $35 billion in overall losses, with $25 billion insured. Such losses from thunderstorms are becoming more common, attributed in part to climate change, which is believed to contribute to the formation of severe storms with tornadoes and hail.
“The effects of climate change are having a stronger and stronger impact on our lives,” said Ernst Rauch, chief climate officer and geo scientist at Munich Re. “The first half of 2023 was characterised by record temperatures in many regions of the world, very high water temperatures in various ocean basins, droughts in parts of Europe, and severe wildfires in northeastern Canada. The global average temperature for June was the warmest ever recorded, up by more than 1.2°C compared to pre-industrial times.
“As in 2016, the natural climate phenomenon El Niño is playing a role in 2023,” Rauch said. “It is characterised by a temperature swing in the Pacific that influences extreme weather in many regions of the world and causes temperatures to temporarily rise further. All the same, research on global temperature trends is unequivocal: rising water and air temperatures worldwide are mainly driven by climate change, in turn causing more weather-related natural disasters and financial losses.”
Looking ahead, hurricane activity in the North Atlantic may increase due to exceptionally high water temperatures in key areas. The unpredictability of the current hurricane season poses challenges for forecasting the extent of potential damages.
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