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Global catastrophe losses reach $US112 billion: Swiss Re

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Global insured catastrophe losses have reached $US112 billion ($157 billion) this year, the fourth-highest level in five decades, Swiss Re says in preliminary estimates.

The total includes $US105 billion ($147 billion) in natural catastrophe losses and $US7 billion ($10 billion) from man-made disasters.

“The impact of the natural disasters we have experienced this year once again highlights the need for significant investment in strengthening critical infrastructure to mitigate the impact of extreme weather conditions,” Swiss Re's Group Chief Economist Jerome Jean Haegeli said.

“Investments in infrastructure support sustainable growth and resilience and need to be upscaled.”

The natural catastrophe total includes a major hurricane, deep winter freeze, floods, severe thunderstorms and heatwaves, with data highlighting the impact of secondary perils.

Hurricane Ida was the costliest natural disaster, with losses of $US30-32 billion ($42-45 billion) including flooding in New York. The figure includes losses from the US National Flood Insurance Program.

But US winter storm Uri and other secondary peril events caused more than half of total losses, as wealth accumulation and climate change effects in disaster-prone areas drive claims, Swiss Re Institute says.

The costliest event in Europe was the July flooding in Germany, Belgium and nearby countries, which caused up to $US13 billion ($18 billion) in insured losses, with economic losses of more than $US40 billion ($56 billion) highlighting a protection gap.

Heat of Cat Perils Martin Bertogg says natural disaster losses have again exceeded the previous 10-year average, continuing the trend of an annual 5-6% rise seen in recent decades.

“It seems to have become the norm that at least one secondary peril event, such as a severe flooding, winter storm or wildfire, each year results in losses of more than $US10 billion ($14 billion),” he said.

“At the same time, Hurricane Ida is a stark reminder of the threat and loss potential of peak perils. Just one such event hitting densely populated areas can strongly impact the annual losses.”

Swiss Re says catastrophe activity in December has remained elevated and resulting losses are still being assessed. COVID-19 has also lengthened the claims lifecycle, particularly for large events, meaning it will take considerably longer than normal to assess the final tally.

Swiss Re Sigma catastrophe loss estimates are for property damage and exclude claims related to COVID-19. Sigma has recorded disaster losses since 1970.