Gallagher Re calls for climate adaptation as industry losses mount – International – Insurance News

Gallagher Re calls for climate adaptation as industry losses mount

6 February 2023

Gallagher Re says more efforts are needed to combat the costly challenges of climate change as the industry covered $US140 billion ($202.40 billion) in natural disaster losses in another year that was dominated by “costly, consequential, and record-setting natural catastrophe events”.

The figures mark a fifth year since 2017 of insured losses exceeding $US100 billion ($144.57 billion), with direct economic losses tallied at $US360 billion ($520.44 billion).

The reinsurer says the numbers reiterate “the need to better account for the growing risks these hazards bring” despite a widening global protection gap.

“The financial cost of natural hazards continues to increase, and we are further recognising that a consistently high global protection gap – 61% in 2022 – means that much more opportunity exists to help people prepare before and after a disaster occurs,” Gallagher Re Global Science Officer Steve Bowen said.

“As catastrophe losses grow more expensive, we again look to the connected nature of climate change, exposure growth, and social inflation as important issues enhancing eventual loss costs.”

The US accounted for several large-scale, costly events, including Hurricane Ian, which the reinsurer estimates to have caused at least $US55 billion ($79.51 billion) in insured losses.

Other notable events include a drought estimated to have caused up to $US9 billion ($13.01 billion) in crop insurance payouts and a series of Severe Convective Storms, with insured losses at over $US20 billion ($28.91 billion).

Mr Bowen says the “fingerprints of climate change” were apparent in natural disaster events worldwide, with devastating floods in Australia, Pakistan and parts of Africa causing billion-dollar economic disasters while record-breaking summer heatwaves sweltered across Europe.

“While we are still trying to account for uncertainties that exist in how climate change may influence events on a regional and per peril basis, it is clear that impacts from the phenomenon are not future tense. They are already being felt today,” Mr Bowen said.

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