Increasing storm damage: Financial expert warns of financial consequences

Increasing storm damage: Financial expert warns of financial consequences

According to a report by www.n-tv.de,

The data from the Munich reinsurer Munich Re shows clear trends and effects of the natural disasters of 2023. The damage caused by earthquakes, hurricanes and storms caused 250 billion dollars worldwide and claimed 74,000 lives. The earthquakes in Turkey and Syria were particularly serious, causing economic damage amounting to $50 billion. Despite the high total damage, only $5.5 billion was insured, meaning insurance companies bore a comparatively small share.

Analysis of long-term trends shows that overall losses have increased in recent decades. But in 2023 there was noticeable thunderstorm damage in North America and Europe, which was not caused by individual large disasters, but by a large number of medium-sized and small severe weather events. This trend towards ever greater damage from severe thunderstorms and severe weather events could be related to climate change.

Rising temperatures are encouraging the development of storms, leading to unprecedented thunderstorm damage in North America and Europe. The insurance industry must adapt to these developments and adapt its risk management, while society as a whole must be better prepared for increasing losses. Prevention through adapting buildings and infrastructure is an important factor in curbing the development of damage.

Due to these developments, the financial sector and the market must prepare for the fact that natural disasters will cause increasingly high levels of damage and that insurance companies will have to bear ever greater financial costs. This could also have an impact on insurance premiums and may require adjustments to risk assessment and coverage.

Overall, Munich Re's data shows that increasing losses from natural disasters pose major challenges for the financial sector and that preventive measures and adjustments in the insurance sector are necessary to deal with these developments.