A high frequency of small to medium events resulted in global insured losses from natural catastrophes totaling $60 billion in the first half of 2024, according to preliminary estimates by the Swiss Re Institute.
Severe thunderstorms, primarily in the US, accounted for 70% of these global insured losses.
Balz Grollimund (pictured above), head of catastrophe perils at Swiss Re, noted that severe thunderstorms had become a major driver of increasing insured losses in recent years.
He attributed this trend to growing populations and higher property values in urban areas, along with the increased vulnerability of insured property to hail damage. Grollimund indicated that multi-billion-dollar loss events from this peril are likely to become more common.
Thunderstorms, or severe convective storms (SCS), characterized by strong winds including tornadoes, hail, and heavy rain, led to $42 billion in insured losses globally in the first half of 2024. In the US, 12 storms each resulted in losses of $1 billion or more.
According to Swiss Re Institute’s sigma 1/2024 report, insured losses from SCS in the US have increased by about 8% annually in nominal terms since 2008.
Jérôme Jean Haegeli, Swiss Re’s group chief economist, highlighted that the growth in insured losses was due to a combination of factors, including inflation, which has driven up construction costs.
Haegeli also emphasized that economic development will continue to increase overall exposures, making investments in protective measures - such as shielding vulnerable communities from floods, or improving building codes to protect homes from severe hailstorms - vital.
Floods also caused above-average losses, driven by events in the UAE, Germany, and Brazil, accounting for 14% of global insured losses. In April, torrential rain from severe thunderstorms led to flash floods on the Arabian Peninsula, resulting in unprecedented damage in the UAE.
Industry estimates also suggest insured losses will likely amount to at least $2 billion, marking the UAE’s costliest natural disaster on record. The severity of these losses is intensified by swift urban growth, land use changes, insufficient drainage systems, and dry soils.
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