Insurance

Natural disasters – Floods around the world cost 73 billion in 2021

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On Wednesday, Swiss Re communicated the costs of the damage caused worldwide, due to the floods. Those that hit Germany and Europe were particularly costly.

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Belgium again hit by bad weather. Here, a road outside Liège where debris is piling up.

AFP

After discovering the extent of the devastation in western Germany, Angela Merkel gave a press conference in Adenau.  (July 18, 2021)

After discovering the extent of the devastation in western Germany, Angela Merkel gave a press conference in Adenau. (July 18, 2021)

AFP

German Chancellor Angela Merkel walks through the devastated village of Schuld near Bad Neuenahr-Ahrweiler in western Germany.  (July 18, 2021)

German Chancellor Angela Merkel walks through the devastated village of Schuld near Bad Neuenahr-Ahrweiler in western Germany. (July 18, 2021)

AFP

The floods caused 82 billion dollars (73 billion francs) in damage in 2021, worldwide, announced Wednesday the reinsurer Swiss Re, which notes significant gaps in the coverage of this risk likely to increase with climate change. .

Floods in Germany and neighboring countries in Europe in July alone resulted in more than $40 billion in economic losses, $13 billion of which were covered by insurance, the reinsurer said in its report on claims costs and natural disasters in 2021. This is the most costly natural disaster ever recorded in Europe, specifies the group which acts as an insurer for insurers.

Increase in losses

But with climate change and increasing urbanisation, Swiss Re’s research institute expects economic losses from flooding to increase. “In 2021 alone, we have witnessed more than 50 serious floods around the world,” quantified Martin Bertogg, Perils and Disasters Manager at Swiss Re, quoted in the press release accompanying the report.

The year was marked by devastating floods, particularly in China, India, the Philippines and the United States in the wake of Hurricane Ida. “Floods affect almost a third of the world’s population, more than all other disasters,” said Martin Bertogg. However, 75% of flood risks are still not insured, quantified the Swiss group, in the press release.

Germany had suffered major flooding in the summer of 2021.

Germany had suffered major flooding in the summer of 2021.

Reuters

“Significant shortcomings”

Of the 82 billion dollars in damage last year, just over 20 billion dollars were covered by insurers, which testifies to “significant gaps in protection against flood risks”, underlines the group reinsurance, in the press release. Deficiencies in flood protection are particularly relevant in Asia, where only 7% of economic losses are covered by insurance, compared to 34% in Europe.

Floods are part of the so-called secondary perils, as opposed to major disasters, such as hurricanes or earthquakes. But the frequency of these secondary perils, which also include tornadoes, storms, hail or drought, is increasing, and driving up the bill for insurers.

Cold wave

In 2021, two of these perils classified as secondary have for the first time resulted in costs exceeding 10 billion dollars for insurers, notes Swiss Re, between the floods in Europe and the cold wave in the United States which had hit extended to Texas.

In 2021, natural disasters caused 270 billion in damage, including 111 billion covered by insurers, according to Swiss Re, which updated its first estimate from mid-December, in this report. Losses caused by man, such as fires or industrial accidents, amounted to 10 billion dollars, of which 8 billion were insured.

(AFP)

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