Economic cost of natural disasters estimated

Destructive thunderstorms and devastating earthquakes last year cost the world around $250 billion in damages, according to a new report issued this week by German reinsurance giant Munich Re.

The figure is similar to what was recorded in 2022 and is close to the average of the previous five years, but above ten-year and 30-year trends. Overall, global insured losses for the year came in at $95 billion, down from $125 billion in 2022.

The report indicated that earthquakes in Türkiye and Syria were the most destructive events last year, causing $50 billion in overall losses and $5.5 billion in losses covered by insurance. The quakes killed over 55,000 people, with a further 100,000 injured, according to the British Red Cross. Munich Re also pointed to a growing number of severe regional storms in the US and Europe as a result of climate change.

“After years of relative calm, a series of devastating earthquakes led to humanitarian disasters. Around 63,000 people (85% of the year’s total fatalities) lost their lives as a result of such geophysical hazards in 2023 – more than at any time since 2010,” Munich Re stated. It noted that 2023 marks another year of “extremely high” damages even without any so-called mega-disasters in industrialized countries.

“The background noise has become louder. Loss events that were previously regarded as secondary and acknowledged as less significant 'side risks' have become a major loss driver,” Ernst Rauch, chief climate scientist at Munich Re, told Reuters.

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