Swiss Re Sets First-Half Catastrophe Insured Losses at $40 Billion

Estimated insured losses from natural catastrophes during the first half of 2021 reached $40 billion, according to the Swiss Re Institute. It was the second-highest first-half insured natural catastrophe loss on record, following 2011, Swiss Re said.

The losses included an estimated $15 billion in insured losses resulting from Winter Storm Uri in the United States, the highest insured loss ever due to a US winter storm. Hailstorms and wildfires also contributed to the first-half losses, Swiss Re said.

Man-made disasters were responsible for another $2 billion in insured losses during this year's first 6 months, less than usual and likely the result of continuing COVID-19 restrictions, according to Swiss Re.

The first-half natural catastrophe insured loss record in 2011 was $104 billion, driven by major earthquakes in Japan and New Zealand, the reinsurer said.

Swiss Re estimated first-half global economic losses from disaster events at $77 billion, a figure the reinsurer said was below the average for the past 10 years of $108 billion. The economic loss figure is expected to rise in coming months, however, as more losses are accounted for, Swiss Re said.

"The effects of climate change are manifesting in warmer temperatures, rising sea levels, more erratic rainfall patterns, and greater weather extremes," Martin Bertogg, head of Cat Perils at Swiss Re, said in a statement. "Taken together with rapid urban development and accumulation of wealth in disaster-prone areas, secondary perils, such as winter storms, hail, floods, or wildfires, lead to ever higher catastrophe losses.

"The experience so far in 2021 underscores the growing risks of these perils, exposing ever larger communities to extreme climate events," Mr. Bertogg said. "For example, Winter Storm Uri reached the loss magnitude that peak perils like hurricanes can wreak. The insurance industry needs to upscale its risk assessment capabilities for these lesser monitored perils to maintain and expand its contribution to financial resilience."