In a year that was marked by devastating storms and cold snaps in the United States, 2021 was recorded as the second most expensive year on record for the insurance companies of the world, according to Munich Re.
The firm said that extreme weather is becoming more common as a result of climate change and causing losses to the insurance industry.
Last year, insured natural disaster losses were roughly $120 billion, second only to the $146 billion in damages suffered during the hurricane-plagued year of 2017.
Munich Re, the world’s largest resinsurer, announced its yearly tally earlier this month, which was higher than Swiss Re’s forecast of $105 billion.
The United States, which was hit by dozens of tornadoes in December, as well as Hurricane Ida and freezes in Texas earlier in the year, accounted for a disproportionately big share of the losses, according to Munich Re.
“The images of natural disasters in 2021 are disturbing. Climate research increasingly confirms that extreme weather has become more likely,” said Torsten Jeworrek, a member of Munich Re’s board.
Natural disasters claimed the lives of about 10,000 people, as was the case in previous years. Total losses, including those not covered by insurance, was at $280 billion, making it the fourth-highest on record.
Hurricane Ida caused $36 billion in insured damages, with destruction extending from New Orleans to New York. Around $15 billion was lost as a result of the winter storm that mostly struck Texas. Floods in Germany have also cost billions.
“The 2021 disaster statistics are striking because some of the extreme weather events are of the kind that are likely to become more frequent or more severe as a result of climate change,” said Ernst Rauch, Chief Climate and Geo Scientist at Munich Re.
Many experts think that climate change intensified extreme weather events in 2021, and that more – and worse – is on the way as the atmosphere of the Earth is slated to get warmer over the next decade and beyond.
2017 was the most expensive year on record, thanks to hurricanes Harvey, Irma, and Maria. Other devastating years included 2011, when large earthquakes struck Japan and New Zealand, and 2005, when Hurricane Katrina wreaked havoc on New Orleans.
As a result of the increased possibility of disasters, insurers have increased their prices in some circumstances and stopped providing coverage in others.
Activists are pressuring insurers to quit insuring filthy industries as they warn about climate change and the expenses connected with it.
(Adapted from InsuranceJournal.com)