Swiss Re: Global insured catastrophe losses to exceed $135bn in 2024

Reinsurance giant Swiss Re has estimated that global insured catastrophe losses are on track to exceed US $135 billion by the end of 2024, marking the fifth consecutive year where the insurance market has dealt with losses of over US $100 billion.

The “new normal” in catastrophe insured losses has been discussed for a while, but it is beginning to feel like $100 billion may be the base-line going forwards, for anything like a normal year of severe weather and natural disaster activity.

The reinsurance company places hurricanes Helene and Milton as the largest insurance market loss drivers of the year, accounting for approaching $50 billion of the annual total.

Together with frequency losses from severe thunderstorms, Swiss Re believes hurricanes and SCS account for around two-thirds of the annual total.

Severe convective storm (SCS) insured losses are estimated at more than $51 billion globally for 2024, making it the second highest annual total on-record, Swiss Re said.

Balz Grollimund, Swiss Re’s Head Catastrophe Perils, commented, “For the fifth consecutive year, insured losses from natural catastrophes break the USD-100-billion mark. Much of this increasing loss burden results from value concentration in urban areas, economic growth, and increasing rebuilding costs. By favouring the conditions leading to many of this year’s catastrophes, climate change is also playing an increasing role. This is why investing in mitigation and adaptation measures must become a priority.”

Flood events are seen as a growing driver of insurance and reinsurance market losses, with close to $13 billion from severe flood events in Europe and the UAE in 2024.

Swiss Re said it was the third-costliest year for the flood peril globally and the second costliest for Europe, which alone saw around $10 billion of insured flood losses this year.

Jérôme Jean Haegeli, Swiss Re’s Group Chief Economist, added, “Economic development continues to be the main driver of the rise in insured losses resulting from floods, but also other perils, seen over many decades. However, with natural catastrophe risks rising and higher price levels, the annual increase of 5–7% in insured losses will continue, and protection gaps could remain high. This highlights the need for adaptation in combination with an adequate insurance coverage that can support financial resilience.”

As well as the US $135 billion of natural catastrophe and severe weather insured losses, the insurance and reinsurance industry also shouldered around $9 billion of man-made catastrophic losses in 224 as well, for an annual disaster loss total estimated at $144 billion, a 16% increase on 2023.

However, the economic loss from these events amounted to $320 billion, with a really significant protection gap evident in natural catastrophe risks once again, as some US $185 billion of nat cat losses went uninsured, according to Swiss Re’s estimate.

Natural catastrophe insured losses are once again well-above the average for the last ten-years, of $108 billion, which will serve to add some stability to property catastrophe reinsurance renewals in 2025, it is expected.