Global disasters exacerbated by climate change produced $210 billion of losses in 2020 as several countries, including the U.S. and China, battled hurricanes, floods, and wildfires, according to a report by reinsurance company Munich Re.1
The worldwide monetary losses in 2020 were up 26.5% compared to 2019’s cost of $166 billion, Munich Re stated. $82 billion worth of damage was insured last year, up from $57 billion in 2019. Last year’s natural disasters claimed approximately 8,200 lives.
“Natural catastrophe losses in 2020 were significantly higher than in the previous year,” said Torsten Jeworrek, a member of Munich Re’s board of management. “Record numbers for many relevant hazards are a cause for concern.”
Reinsurers, which provide financial protection to insurance companies, saw their share prices drop throughout 2020. Shares of Munich Re, Berkshire Hathaway, Swiss Re, and AIG dropped 1.5%, 2.7%, 14.3%, and 21%, respectively, over the past 12 months.
Natural disasters in the U.S. accounted for $95 billion of overall losses in 2020, compared to $51 billion in 2019.
One of the problems the report highlighted was the lack of insurance coverage for disasters in developing countries. Floods in China were responsible for the highest individual loss of $17 billion, but only around 2% of that was insured. Overall losses in Asia were $67 billion, and while the damage cost 13% less than in 2019, only $3 billion in 2020 was insured.
Europe’s natural disaster figures were relatively benign, with $12 billion of overall losses and $3.6 billion of insured losses.