Swiss Re: Global Natural Disaster Losses Plummet to $100 Billion in First Half

Economic losses from natural disasters worldwide reached $100 billion in the first half of this year, according to Swiss Re. This is a significant decline from the $152 billion recorded in the same period last year, and also 10 percent below the 10-year average for the period. Despite severe storms in the United States and deadly earthquakes in Venezuela, losses were lower than expected. Balz Grollimund, director of catastrophe perils at Swiss Re, noted that 'a less costly first half of the year does not mean the risk has gone away.' He warned that one major hurricane, earthquake, or wildfire can quickly change the picture.

The Venezuelan earthquakes caused the most economic damage, estimated at around $20 billion. However, low insurance levels mean the share of insured losses is likely to be low. Insured wildfire losses in Europe have risen by 8-11 percent per year since 1970 after adjusting for inflation and other factors. Swiss Re said building resilience to a warmer and more fire-prone environment will be key to preventing larger wildfire losses.

The reinsurer also warned that the El Nino climate pattern, which began in June and is expected to peak later this year, could accentuate the cost from weather-related disasters. Although a strengthening El Nino may temper North Atlantic hurricane activity, the risk of a costly major event remains.