Natural disasters cost insurance industry $76 billion in 2020

Natural disasters like wildfires which devastated parts of the United States and a record number of hurricanes in the Atlantic caused $76 billion in insured losses during 2020, Swiss Re said on Tuesday.

The 40% increase from $54 billion in 2019 dwarfed the $7 billion in man-made losses during 2020, the reinsurance company said in its sigma estimate for the year.

The total insurance industry losses of $83 billion made 2020 the fifth costliest year since 1970, the company said.

"Losses were driven by a record number of severe convective storms - thunderstorms with tornadoes, floods and hail - and wildfires in the U.S.," Swiss Re said.

In California, Oregon and Washington State, more than 800 wildfires burned close to 6 million acres, destroying thousands of structures and triggering billions in insured claims.

The North Atlantic hurricane season brought 30 named storms, causing $20 billion in insurance claims, the company said.

Climate change is expected to worsen the number of such events, as humid air and rising temperatures create more extreme weather conditions, Swiss Re said.

"As with COVID-19, climate change will be a huge test of global resilience," Jerome Jean Haegeli, Swiss Re Group Chief Economist said.

"But while COVID-19 has an expiry date, climate change does not, and failure to ‘green’ the global economic recovery now will increase costs for society in future," Reuters cited him as saying.

It noted its catastrophe loss estimates excluded claims related to COVID-19, which it said would take considerably longer than normal to assess and tally.