'Time to act' as global nat cat losses reach $210bn in 2020: Munich Re's Jeworrek

Global losses from natural disasters in 2020 rose to $210 billion, of which some $82 billion was insured, a near 44 percent increase from the previous year, according to Munich Re.

In 2019, the overall losses amounted to $166 billion, and insured losses to $57 billion.

The sharp increase in the losses was attributable to a record hurricane season, historic wildfires in the western US and floods in China, among other global natural disaster events.

"Natural catastrophe losses in 2020 were significantly higher than in the previous year," said Torsten Jeworrek, member of board of management and CEO of reinsurance at Munich Re. "Record numbers for many relevant hazards are a cause for concern, whether we are talking about the severe hurricane season, major wildfires or the series of thunderstorms in the US.

"Climate change will play an increasing role in all of these hazards. Five years ago in Paris, the global community set itself the target of keeping global warming well below 2°C. It is time to act," Jeworrek added.

The US share of losses was notably high, with natural disasters accounting for $95 billion, of which $67 billion were insured. In 2019, losses from US natural disasters amounted to $51 billion, of which $26 billion were insured.

Of the ten costliest natural disasters in 2020, six occurred within the US, with the most destructive event being a Category four hurricane, Laura, which caused losses of $13 billion, of which $10 billion were insured.

Overall, the uninsured portion of natural disaster losses in 2020 was around 60 percent, according to Munich Re, with Asia remaining notable for its coverage gap. The year’s costliest natural disaster was the severe flooding in China during the summer monsoon rains, which caused approximately $17 billion of damage, of which only around 2 percent was insured.

The year was also characterised by large wildfires across the western US, including record-setting fires - in terms of area burned - in California and Colorado. Losses from wildfires in the western US amounted to $16 billion, of which $11 billion was insured.

In Europe, the natural disaster figures for 2020 were relatively low, with overall losses coming in at $12 billion, of which $3.6 billion were insured.

Ernst Rauch, chief climate and geo scientist at Munich Re, said the extreme losses for 2020 fit with the expected consequences of a decades-long warming trend for the atmosphere and oceans.

“An increasing number of heatwaves and droughts are fuelling wildfires, and severe tropical cyclones and thunderstorms are becoming more frequent,” he said. “Research shows that events such as this year’s heatwaves in northern Siberia are 600 times more likely to occur than previously.”