Zurich, Switzerland—Total losses caused by natural and man-made disasters hit an estimated $77 billion in the first half of 2021, Swiss reinsurance giant Swiss Re said Thursday.
The Zurich-based group, which acts as an insurer for insurers, said severe weather events including winter storm Uri in the United States and June storms in Germany and its neighbors pushed up the losses.
“Of the total estimated economic losses in the first half of 2021, $74 billion were caused by natural catastrophes, while man-made disasters triggered an additional $3 billion,” Swiss Re said in a statement.
The reinsurer said that extreme heat in June shattered temperature records in western North America, which led to wildfires in southern California.
“The effects of climate change are manifesting in warmer temperatures, rising sea levels, more erratic rainfall patterns, and greater weather extremes,” said Martin Bertogg, Swiss Re’s head of catastrophe perils.
“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.”
At $77 billion, the total economic losses are lower than the $114 billion toll for the first half of last year and lower than then the 10-year average of $108 billion.
However, the cost of those losses to insurers are set to be higher.
At $40 billion, estimated insured losses from natural catastrophes at are the second-highest on record for a first half—the highest being 2011, when major earthquakes in Japan and New Zealand pushed the six-month total to $104 billion.
The figure is 13 percent higher than 12 months ago.
Uri, which hit the United States in February with the cold snap reaching as far as Texas, cost $15 billion in insured losses.
The June storms in Europe generated costs estimated at $4.5 billion for insurers.
Man-made disasters triggered another estimated $2 billion of insured losses in the first half of 2021, less than usual and likely reflecting remaining COVID-19 restrictions, said Swiss Re.
Going into the second half of the year, July saw severe flooding cause property destruction and loss of life in Europe and China.
Meanwhile, this month’s wildfires in Turkey, Greece, and Italy, fueled by extreme heat, are expected to lead to further losses.
“The experience so far in 2021 underscores the growing risks of these perils, exposing ever larger communities to extreme climate events,” Bertogg said.
He said Uri reached the loss magnitude expected of peak perils such as hurricanes.
“The insurance industry needs to upscale its risk assessment capabilities for these lesser-monitored perils to maintain and expand its contribution to financial resilience,” said Bertogg.