Climate catastrophes Cost Hits $280 Billion.
In its highly regarded annual study on climate change, Swiss Re estimated the costs of climate catastrophes in 2023 at $280 million. The study, “Sigma 1/2024—Natural catastrophes in 2023,” said, “In 2023, natural catastrophes resulted in economic losses of USD 280, of which 38% were covered by insurance.”
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The rapid growth in financial consequences is material:
Global natural catastrophe insured losses have grown at a much faster rate than the global economy over the last 30 years. In inflation-adjusted terms, on average insured losses from natural catastrophes were up 5.9% per annum in the period 1994–2023, while global GDP was up 2.7% in the same period. In other words, the insurance loss burden has more than doubled.
The report also said insured losses will double again in the next decade.
The study also states the obvious. Nations with the most assets to insure from climate change losses are the most likely to have high insurance claims, which creates risk for insurance companies’ balance sheets. Poor nations tend to have less valuable assets, but that does not mean their populations will be less devastated by floods, heat, drought, or storms.
Losses in developed nations will be controlled to some extent as insurance companies withdraw from certain risks, including geographic areas prone to wildfires and hurricanes.
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