“The year 2023 was once again characterised by extremely high insured losses from natural disasters, despite the fact that there were no extreme individual losses,” said Thomas Blunck, member of the board of management at Munich Re, in a report released this week. Photo: Munich Re

“The year 2023 was once again characterised by extremely high insured losses from natural disasters, despite the fact that there were no extreme individual losses,” said Thomas Blunck, member of the board of management at Munich Re, in a report released this week. Photo: Munich Re

In a year marked by extreme weather, 2023’s natural disasters, including a deadly earthquake in Turkey and Syria, and record-breaking thunderstorms in North America and Europe, led to losses totaling $250bn and revealed a significant insurance gap, noted Munich Re in a recent report.

2023 witnessed a high incidence of natural disasters with overall losses equaling $250bn globally, said Munich Re, a leading German multinational reinsurance company. These figures, on Tuesday 9 January, remained consistent with the previous year’s losses. Insured losses, however, stood at $95bn, slightly below the five-year average of $105bn, yet surpassing the ten-year average of $90bn.

Earthquake in Turkey and Syria

The earthquake in Turkey and Syria emerged as the year’s most catastrophic humanitarian disaster. The quake, registering a magnitude of 7.8, resulted in the death of around 58,000 people, marking it as the deadliest event since 2010. The total financial impact was estimated at $50bn, with insured losses reaching just $5.5bn, highlighting a significant insurance gap.

Thunderstorms in North America and Europe

North America and Europe experienced the most destructive thunderstorms ever recorded. In North America, assets worth approximately $66bn were affected, with $50bn covered by insurance. European storms led to damages of €9.1bn ($10bn), with insured losses of €7.3bn ($8bn). These events underscore the influence of climate change on severe weather patterns, said Munich Re.

Record-breaking global temperatures and other extreme events

The average global temperatures till November 2023 were about 1.3°C higher than pre-industrial times (1850-1900), setting 2023 up as the hottest year on record. This increase in temperature, influenced by climate change and the El Niño phenomenon, contributed to numerous weather-related disasters. Significant wildfires in Canada, which ravaged 18.5m hectares of forest, were also a result of these extreme temperatures, stated Munich Re.

Intensifying storms

Typhoon Doksuri and Hurricane Otis highlighted the trend of increasingly intense storms in 2023. Doksuri, affecting the Philippines and China, resulted in overall losses of $25bn, with a minor fraction insured. Otis, which hit Mexico, brought about losses estimated at $12bn, with a notable insured sum of $4bn due to the high concentration of hotels in Acapulco.

Storms and flooding in Europe

In Europe, losses due to natural disasters reached €77bn ($83bn), with insured losses of about €18bn ($19bn). The largest contributor to this figure was the Turkey earthquake. Additionally, hailstorms and flooding, particularly along the Adriatic coast and in northern Germany, added to the high loss totals in the region.

In the report, Ernst Rauch, Munich Re’s chief climate scientist, emphasised the importance of societal and industrial adaptation to the evolving risks posed by climate change.

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