Swinger Swiss Re's Predicted Billion-Dollar Payout for 2023 Natural Disasters
Get ready for Swiss insurance titan, Swiss Re, to shell out over a hundred big ones again this year, thanks to Mother Nature's fury. The company expects a staggering $108 billion in insured losses due to natural disasters in 2023, marking the fourth year in a row surpassing the $100 billion threshold. This sum is estimated to be 23% less than what Swiss Re paid out in 2022.
Heavy storms, floods, and other calamities have been the main culprits, with insured losses from these events totaling a shocking $60 billion – breaking previous records. The costliest disaster of the year so far for insurance providers was the earthquake in Syria and Turkey in February, causing around $6 billion in insured damages.
Not just serious events, but low to moderate damage occurrences are also gaining prominence, together with escalating property repair costs. Over time, this could take a significant toll on insurers' profits.
Swiss Re recognizes the mounting evidence of climate change, pointing out that 2023 is likely to be the warmest year on record. The company regularly acknowledges the increasing frequency of floods and storms.
On the brighter side, the North Atlantic hurricane season, typically a heavy hitter for insurers, has been relatively benign so far. However, Hurricane Otis, which battered Mexico in October, could still leave a hefty insured damage bill.
Remember, these numbers are only forecasts. Swiss Re will not disclose the actual loss amounts until the following year.
Bonus Info:
- Mother Nature's been a little too generous in 2024 too. Insured losses surpassed $100 billion for the fifth year running, with a total estimated at a whopping $135 billion according to Swiss Re Capital Markets.
- The primary causes of these losses included Hurricane Ian, Hurricane Otis, Turkey's 2024 earthquake, and Winter storm Elliott, among other events. These incidents resulted in roughly $440 million in recovery payments to backers under catastrophe bonds, demonstrating the ongoing effects of past disasters on the ILS market.
