Global economic losses from disasters (natural and human-caused) last year reached $146 billion.
Secondary catastrophic perils are rising in a measurable way as a result of climate change, said a recent Swiss Re Institute sigma. The sigma was titled “Natural catastrophes in times of economic accumulation and climate change”.
Severe weather events were the primary driver of losses overall last year, as was the case in years prior.
Last year, worldwide economic losses from disasters broke the $146 billion mark. This represented a fall from 2018’s $176 billion. The ten-year annual average up to that point had been 212 billion. These, according to the Swiss Re data. Of last year’s total, insured losses comprised $60 billion. In 2018, that figure was $49 billion, and the ten-year annual average for covered losses was $75 billion.
The sigma suggested that severe weather events were responsible for the majority of the losses last year and in previous years. The Swiss Re data also predicts that climate change will continue to push higher the frequency and intensity of severe weather events. At the same time, global warming will also maintain a higher level of uncertainty in predicting and assessing the primary and secondary catastrophic perils.
Primary and secondary catastrophic perils are evolving, but it remains difficult to predict the immediate impact.
“Climate change is happening,” said Swiss Re Institute Chief Economist for the Americas, Thomas Holzheu. “We have observed the rise of average temperatures and sea levels are rising. We also observe longer and more frequent heat waves, more erratic rain patterns and more extreme weather events. These climate change patterns are affecting catastrophe (CAT) events.”
Holzheu went on to say that they have observed “particular evidence in increased losses” when it comes to secondary catastrophic events. These include flooding from severe rainfall, wildfires from droughts and wind, tornadoes, and so on, some of which are also primary events. For instance, hurricanes linked with rainfall and flooding as well as increased winds and coastal storm surge are becoming more frequent and more severe. “We’re definitely seeing more of the secondary effect – that’s one of the key takeaways of the sigma.”