Globally, insured damages from natural disasters are increasing rapidly and are expected to double in about 10 years, as per a report published by Swiss Re Institute – the research arm of the giant reinsurance company.

The financial implications for the insured will be severe if the trend continues as projected. "Premiums must move in line with this risk," stated Jerome Jean Haegeli, chief economist at Swiss Re and the report's lead author.

Insured losses from natural disasters are experiencing a slow and steady increase. While there was a decrease from 2022 and 2021, it marked the fourth consecutive year surpassing $100 billion. Only about 40% of global economic losses are insured, meaning the total economic losses are much higher.

Historically, years with major hurricanes like Harvey (2017) or Katrina (2005) have been peaks, pushing global insured losses above the $100 billion mark. However, recent years have seen a significant rise in smaller events – particularly powerful storms – causing substantial damage.

In 2023, the event with the largest losses was the February earthquake in Turkey and Syria, a tragedy that claimed the lives of approximately 58,000 people. The insurance penetration in the most affected area was very low, with insured damages from the earthquake amounting to about $6.2 billion.

Conversely, 18 storms in 2023 caused damages exceeding $1 billion each, resulting in a record $60 billion in losses. The USA, relatively well-insured, endured disproportionately many storms and saw 85% of last year's damages. Losses from severe convective storms – characterized by sudden downpours, strong winds, and hail – are increasing by about 7% annually for the past 30 years.

2023 was the hottest year on record due to greenhouse gas emissions warming the planet, and January and February were the warmest ever recorded. Science is just beginning to connect the dots between more frequent storms and the temperature rise caused by climate change. "Storms thrive in a warm, moist environment," Bernadette Woods Placky, chief meteorologist at Climate Central, a non-profit serving as a clearinghouse for climate research.