Disasters caused $65bn losses in the first half of 2022, says report

Extreme rainfall and repeated and intense flooding in Australia constituted the main loss burden for insurance industry, according to report

Extreme weather events in the first half of 2022, many of which were attributed directly to climate change, have caused an economic loss of over $65bn, with slightly more than half of these insured, according to the latest report by German insurer Munich Re.

The report released on Thursday by the multinational company focuses on the economic losses incurred in disasters that took place between January and June 2022, including tornados in the US, winter storms in Europe, earthquakes in Japan and Afghanistan, floods in Australia and the ongoing heatwave in several parts of the world.

The data compiled in the report shows an overall loss of over $65bn dollars from these events, out of which $34bn worth of assets were insured. The rest was uninsured damage.

The report says extreme rainfall and repeated and intense flooding in Australia this year constituted the main loss burden for the insurance industry of at least $3.7bn.

Other disasters in the Asia-Pacific were found to have caused a loss of about $22bn, including the deadly earthquake in Japan, which cost about $8.8bn with just $2.8bn worth assets insured.

The US was, however, the country with highest weather-related losses with a figure around $28bn. The country also had the highest share of insured losses.

“A series of severe thunderstorms with tornadoes was the principal cause of these losses [in the US],” the report said.

“A single thunderstorm front that produced tornadoes in early April destroyed assets worth over $3bn, three-quarters of which were insured – a perfect example of how high insurance density can help absorb the economic shocks of natural disasters.”

The number of fatalities from natural disasters in the first half of 2022 was 4,300, much more than in previous years.

Extreme heat, drought and wildfires are increasing in many regions of the world, the report noted. However, it added that it is difficult to put an exact figure on losses from heat and drought as their effects, such as production losses in industry due to a lack of cooling water, take a while to emerge.

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“The natural disaster picture for the first half of 2022 is dominated by weather-related catastrophes,” Torsten Jeworrek, member of the board of management at Munich Re said.

“Extreme tornadoes in the US caused billions in damage, parts of eastern coastal Australia were submerged by floods, and southern Europe struggled with extreme heat, wildfires and drought.”

Ernst Rauch, chief climate scientist at Munich Re, said that while these may be individual events with different causes, the “powerful influence of climate change is becoming ever more evident”.

“The consequences for people across the world are becoming ever more palpable,” Mr Rauch said.

“The IPCC has made an even clearer diagnosis, stating that weather-related disasters such as heatwaves, torrential rainfall or droughts on a warmer Earth will increase in both frequency and intensity.”