Price Tag For Climate Change Hits $66 Billion
The German insurance company Munich Re conducts a yearly study on the costs of natural disasters worldwide. For 2023, the total price tag hit $250 billion. That includes both weather events and earthquakes. The dollar amount for storm-related catastrophes in North America and Europe reached $66 billion, of which $50 billion was insured. It is a reminder of the huge losses some insurers experience because of climate change and why they have raised rates sharply or left some markets altogether.
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Thomas Blunck, a Member of the Board of Management, summed up the findings:
“The year 2023 was once again characterised by extremely high insured losses from natural disasters, despite the fact that there were no extreme individual losses. This underlines the important role that insurance plays in cushioning the consequences of natural disasters. Comprehensive data and in-depth knowledge of changes in risks remain key factors when designing covers to protect people against natural disasters. A further important aspect is prevention.”
The comment was self-serving, but it is true. Insurance helps “cushion” but at a huge cost to the insured.
Munich Re pointed to global warming as a major cause of catastrophes. The reports focused particularly on temperatures in southwest Europe in April, in Argentina in September, and northwest China and Arizona in July. Temperatures in Phoenix topped 100 degrees F for 90 days in the summer, a record number.
Finally, Blunck commented that his company had the means to analyze disasters and prepare for losses. He did not say Munich Re would contribute anything to the cause of climate change.
