Munich Re estimates global disaster losses in 2024 at USD320 billion

(Alliance News) - Natural disasters such as hurricanes and floods caused losses totalling USD320 billion worldwide in 2024, according to a report from German reinsurance firm Munich Re published on Thursday.

The losses are well above the average from recent decades and one of the most expensive years for natural disasters since 1980, even after adjusting for inflation, according to Munich Re's calculations.

The scientists at the Munich-based company see an increasingly clear link to climate change, as warm temperatures favour the development of storms.

"The world is hotter than ever before," said Munich Re's chief climatologist, Tobias Grimm. "And this is causing stronger storms, severe weather and flooding."

Only about USD140 billion of the losses in 2024 were insured, according to Munich Re.

According to Munich Re's calculations, the average inflation-adjusted annual losses from natural disasters over the past three decades has been USD181 billion dollars.

The average over the past decade has been higher, at USD236 billion, according to the company.

In terms of insured losses, 2024 was the third-most expensive year since 1980, according to Munich Re. Total losses in 2024 were the fifth-highest since 2024.

"Not every storm can be attributed to climate change," said Grimm. "But it is becoming increasingly clear that climate change plays a major role."

Munich Re has been documenting global losses from natural catastrophes for decades, as those losses are an important factor in the calculation of insurance premiums.

As the world's largest reinsurer, Munich Re acts as an insurer for insurance firms.

For consumers and companies, the long-term trend of rising losses means that insurance and other policies covering storms and other natural disasters are becoming notably more expensive.

When it comes to natural disasters, insurance companies differentiate between "peak perils" - such as major hurricanes or earthquakes - and everyday risks such as thunderstorms and flooding.

"In 2024, we had both: very damaging hurricanes as well as a series of storms and floods," said Grimm. "And that explains why we are significantly higher in 2024 than last year and also above the long-term loss average."

The region of the world that is regularly hit hardest by natural disasters is North America. With estimated economic losses of USD190 billion dollars, 2024 was no exception, according to Munich Re.

"This was due to both hurricanes and an extremely damaging storm season, especially a high number of tornadoes," said Grimm.

Hurricanes Helene and Milton alone caused damaged that Munich Re estimated at USD94 billion.

The current devastating forest fires in California naturally do not appear in last year's loss statistics, but Munich Re's geoscientists count the densely populated US state among the high-risk areas where climate change is increasing the danger of devastating forest fires.

However, Grimm said that a long-term trend increase in natural catastrophe losses can also be observed in Europe. Munich Re put last year's total losses in Europe at USD31 billion, of which USD14 billion were insured.

"The floods in Valencia in Spain alone caused over USD4 billion dollars in insured losses," he said.

Extreme weather events are also now being seen in places that never had comparable disasters before, Grimm said, pointing to April 2024 flooding in Dubai, a desert city that rarely sees rain.

"Climate change is showing its claws. It can have an impact and be felt everywhere," said Grimm.

However, the number of fatalities worldwide last year was below average at 11,000, Grimm said. This was partly due to chance - for example, there was no devastating earthquake in 2024 comparable to the disastrous earthquakes that killed tens of thousands in Turkey and Syria in 2023.

However, it also shows "that prevention works," Grimm said, as many countries have greatly expanded efforts to mitigate the threat from typhoons and earthquakes in recent decades.

Long-term natural disaster forecasts are not possible, but the conditions for a lively cyclone season next summer are in place. Water temperatures in the world's oceans remain unusually high compared to long-term historical data.

"Ocean temperatures are an important driver for the formation of tropical cyclones," said Grimm. "The warmer the oceans are, the more water can evaporate and the heavier it can rain. At the moment, there are no signs that the oceans are cooling again."

source: dpa

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