Severe thunderstorms in the United States during the first half of this year caused a record-breaking $34 billion in insured losses, signaling the significant financial impact of climate change-induced weather events, according to Swiss Re Group. Convective storms, characterized by hail, lightning, heavy rain, and high winds, were responsible for nearly 70% of the $50 billion in global catastrophic damages reported so far this year, including earthquakes in Turkey and Syria. Texas was particularly affected by these storms, with 10 incidents resulting in damages exceeding $1 billion each, almost double the average of the past decade.
“The effects of climate change can already be seen in certain perils like heatwaves, droughts, floods, and extreme precipitation,” commented Swiss Re Group Chief Economist Jérôme Jean Haegeli. He also highlighted the impact of land use planning in vulnerable coastal and riverine areas, as well as urban sprawl, which leads to higher exposure in risky environments.
The second half of the year has also seen noteworthy meteorological events, such as heatwaves in the US, northwestern China, and southern Europe, as well as wildfires in Greek islands, Italy, and Algeria. The damages and insurance losses from these events are still being assessed by Swiss Re.
These figures align with a report published last month by another reinsurer, Munich Re, which declared that the thunderstorms in Texas in June were the most costly event in the United States so far this year, with an estimated loss of $8.4 billion. Marcus Winter, CEO, North America at Munich Reinsurance America, emphasized the necessity of preparing communities for future climate-related weather events, stating that increasingly severe storms are becoming the norm rather than the exception.
The insurance industry’s insurers, reinsurers like Munich Re and Swiss Re, have a global presence, including operations in the US. The escalating frequency of extreme weather events has caused turmoil within the insurance industry, resulting in some insurers pulling back from states like Florida and California that are consistently impacted.
One resident, Kerry Symons, who is both a businessman and the mayor of Perryton, Texas, shared his firsthand experience of dealing with the aftermath of a tornado in June. Symons emphasized the importance of conducting an annual accounting of the contents and rebuild cost of a building, as this had proven challenging during the insurance claim process for his damaged properties. He also noted that the increasing frequency of extreme weather events has led to disruptions and challenges for insurers in affected areas.
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