Swiss Re Group says waves of violent thunderstorms caused $34 billion in insured losses during the first half of this year in the United States, an unprecedented amount of financial harm in such a short period of time. Climate change is a factor in the frequency and severity of these violent meteorological events.
According to the reinsurer, about 70% of the $50 billion in worldwide catastrophic damages so far this year have been caused by convective storms, which can produce hail, lightning, heavy rain, and strong winds. Earthquakes in Turkey and Syria are included in the global total.
The number of storms that caused $1 billion or more in damages or more in the U.S. was ten, about twice the average amount that had been seen over the previous ten years. Texas was the state most severely affected.
Jérôme Jean Haegeli, the chief economist for Swiss Re Group, stated in a prepared statement that “the effects of climate change can already be seen in certain perils like heat waves, droughts, floods, and extreme precipitation.” In addition to the effects of climate change, urban development into the wilderness and more exposed coastal and riverine areas’ planned land uses produce a difficult-to-reverse mix of high-value exposure in riskier conditions.
The second half of the year has already seen a plethora of high-profile climatic phenomena, such as heat waves in the United States, north-west China, and southern Europe, as well as wildfires on Greek islands, in Italy, and in Algeria.
According to Swiss Re, the costs of the incidents’ damages and insurance losses are still being calculated.
The insurance sector has been disrupted by the rising frequency of extreme weather, and several companies have pulled out of hard-hit places like Florida and California.
Despite years of increasing prices for property owners in hard-hit jurisdictions, insurers are now pulling back.
State Farm and Allstate have left the California house insurance market, claiming that the state’s rising wildfire danger and surging building prices prevent them from continuing to offer new policies there. California is the state with the most residents.
Travelers, a company that is seen as a bellwether for the insurance sector due to its size, said last month that catastrophe losses doubled in its most recent quarter and that it lost money.
Despite legislative efforts to stabilize the unpredictable insurance market, AAA has announced that it will not renew “a very small percentage” of homeowners and vehicle insurance policies in hurricane-ravaged Florida, joining other insurers in doing so.
Insisting that it is not abandoning Florida, AAA claims that the terrible hurricane season of the previous year had caused an unprecedented increase in reinsurance premiums, increasing the cost of doing business there.
Since 1992, when Hurricane Andrew destroyed Homestead, eliminated some insurance carriers, and caused many remaining insurers to be wary of issuing or renewing policies in Florida, the state of Florida has battled to preserve stability in the insurance industry. As hurricane strength and rainstorm severity rise due to climate change, risks for carriers have also been rising.
