US storms make 2021 one of most costly years for insurers: Swiss Re

Hurricane Ida, where damage stretched from New Orleans to New York, resulted in US$30 - US$32 billion in insured losses. PHOTO: REUTERS

FRANKFURT (REUTERS) - Hurricane Ida and a winter storm that brought freezing temperatures to Texas made 2021 one of the costliest years on record for insurers, Swiss Re said on Tuesday (Dec 14).

It also warned of bigger losses in years to come as populations and industry face the prospect of increasingly severe weather events amid climate change.

Insured losses from natural catastrophes totalled US$105 billion (S$144 billion) this year, the fourth-highest since reinsurer Swiss Re began keeping records in 1970.

"Natural catastrophe losses are likely to continue to grow more than global GDP given increases in wealth, urbanisation and climate change," Swiss Re said in a statement with its annual tally, referring to gross domestic product.

More than 10,000 people were killed or are still missing as a result of this year's natural disasters, Swiss Re said.

Hurricane Ida, where damage stretched from New Orleans to New York, resulted in US$30 billion to US$32 billion in insured losses. Winter storm Uri, which primarily hit Texas, resulted in US$15 billion in losses.

Floods in Germany and surrounding countries resulted in US$13 billion in insured damages.

Many of the events in 2021 were exacerbated by climate change, scientists say, adding that there are more - and worse - to come as the Earth's atmosphere continues to warm through the next decade and beyond.

The costliest year on record was 2017, with hurricanes Harvey, Irma and Maria. That was followed by 2011, when big earthquakes hit Japan and New Zealand, and 2005, when Hurricane Katrina ravaged New Orleans.

Insurers in some cases have been raising the rates they charge as a result of the increasing likelihood of disasters, and in some places they have stopped providing coverage.

As insurers warn about climate change and the costs associated with it, they themselves are under pressure from activists to stop insuring dirty industries.

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