Natural disasters caused losses of $65bn in the first half of this year alone, with half of these assets uninsured, data from Munich Re has revealed.
The report also found that extreme multi-day rainfall and severe flooding in Australia constituted the main loss burden for the insurance industry of at least $3.7bn.
Other countries in the Asia-Pacific region were also hit by major disasters, Munich Re said, such as Japan, which was struck by a 7.3 magnitude earthquake on the main island Honshu.
In total, the Asia-Pacific region accounted for $22bn of overall natural disaster losses in the first half of the year, this is higher than usual. Insured losses came to $8bn.
The report also stated that the US dominated the loss figures. With a figure around $28bn, the country accounted for almost half of overall losses.
In Europe, Munich Re said extreme heat and arid conditions in early summer led to water scarcity and wildfires, especially in Italy, Spain and Portugal. However, it is often difficult to put an exact figure on losses from heat and drought as their effects, such as production losses in industry due to a lack of cooling water, take a while to emerge.
Torsten Jeworrek, member of the board of management at Munich Re, said, “The natural disaster picture for the first half of 2022 is dominated by weather-related catastrophes. Extreme tornadoes in the US caused billions in damage, parts of eastern coastal Australia were submerged by floods, and southern Europe struggled with extreme heat, wildfires and drought.
“The recently published IPCC report warned of the need for insurers to adapt their loss models to adequately assess the changing risk. Loss prevention is a fundamental component in mitigating the economic effects of climate change. It is therefore extremely worrying that insurance penetration in developing and emerging nations is stagnating at well below 10%, and that even in industrial countries there is much room for improvement.”
Earlier this year, Munich Re partnered with parametric InsurTech Skyline Partners and Howden to develop a parametric insurance solution designed to protect farmers in Jamaica from extreme weather events.
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