Severe thunderstorms cause $35bn in insured losses
Severe thunderstorms accounted for up to 70 per cent of all insured natural catastrophe losses in the first half of 2023, according to a new report from the Swiss Re Institute.
The report revealed that a series of widespread severe thunderstorms in the United States accounted for 68 per cent of global insured natural catastrophe losses in the first half of this year, highlighting the increasing loss impacts of secondary perils.
The information came as weather warnings went up in the central US, forecasting severe thunderstorms, large hail, damaging wind gusts and possible tornadoes this week.
Martin Bertogg, head of catastrophe perils at Swiss Re, said: “With severe thunderstorms as the main driver for above-average insured losses in the first half of 2023, this secondary peril becomes one of the dominant global drivers of insured losses.”
He said the above-average losses reaffirm a 5 to 7 per cent annual growth trend in insured losses, driven by a warming climate but even more so by rapidly growing economic values in urbanised settings globally.
“The cyclone and flood events in New Zealand in the first quarter of 2023 are testimonies of the risk to today’s large urban centres, continuing patterns observed in 2021 in the Germany flooding, and in 2022 in Australia and South Africa,” he said.
Severe convective storms — storms associated with thunder, lightning, heavy rain, hail, strong winds and sudden temperature changes — caused $35 billion (nearly 70 per cent) in insured losses worldwide in the first half of 2023. This means that insured losses are almost twice as high in a six-month period as the annual average of the last decade ($18.4 billion).
The Swiss Re Institute also said ten events caused losses of $1 billion and above each, compared with an annual average of six events for the previous ten years. The most affected state was Texas.
New Zealand was hit by two severe weather events just two weeks apart in early 2023, highlighting the growing risk of weather-related perils hitting large urban centres. In particular, the North Island of New Zealand was hit in quick succession in the first quarter with severe flooding.
The report also stated that global insured losses from natural catastrophes were $50 billion in the first half of this year, the second highest in 12 years, compared with $48 billion in the first half of last year.
A February earthquake in Turkey and Syria was the single costliest disaster both in terms of economic and insured losses.
The 7.8-magnitude earthquake caused material damage and affected the livelihood of millions of people across the region. Insured losses are estimated at $5.3 billion and preliminary economic losses at $34 billion.