Countdown: The Rising Cost of Climate Disasters

According to insurers and risk modeling experts, climate change has increased the cost of natural disasters by increasing the frequency and severity of flooding and wildfires.

Source: Reuters | Published on November 16, 2022

climate change and higher insurance rates

According to insurers and risk modeling experts, climate change has increased the cost of natural disasters by increasing the frequency and severity of flooding and wildfires.

The ten most expensive events of the last decade, as provided to Reuters by risk modeling firm RMS, all occurred within the last five years.

While richer countries with more expensive assets suffer the greatest losses, developing countries such as Pakistan, which suffered flooding this year that cost an estimated $3 billion, frequently bear the brunt of damaging weather events.

The question of how to get money to poorer countries after natural disasters has been a recurring theme at the COP27 climate talks in Egypt, and insurance is seen as one solution.

At the climate conference on Monday, the G7-led “Global Shield” plan to provide pre-arranged insurance and disaster protection funding to countries suffering from climate disasters was unveiled.

The disasters are ranked by economic losses, both insured and uninsured, with the costliest first.

California wildfires 2017-2018

After a multi-year drought in California, numerous fires destroyed more than 100 million trees.

Worst fires: Tubbs Fire Oct 2017, Camp Fire Nov 2018

  • 2017 loss: $180 billion
  • 2017 deaths: 40
  • 2018 loss: $148.5 billion
  • 2018 deaths: 103
  • Total loss: $328.5 billion

Atlantic hurricanes Harvey, Irma, Maria Aug-Sept 2017

The three hurricanes devastated parts of Florida, Texas, Puerto Rico and the Caribbean.

  • Harvey loss: $125 billion
  • Harvey deaths: 88
  • Irma loss: $65 billion
  • Irma deaths: 134
  • Maria loss: $107 billion
  • Maria deaths: 4,600
  • Total loss: $297 billion

Australian bushfires 2019-2020

  • Nearly 11 months of fires affected 80% of Australians and killed or displaced at least three billion animals.
  • Total loss: $110 billion
  • Deaths: 34

Hurricane Ian, Florida, Sept 2022

  • The hurricane hit southwestern Florida and South Carolina, with a 4-metre high storm surge on the west coast of Florida.
  • Total loss: more than $100 billion
  • Deaths: 101

Hurricane Ida Aug 2021

  • The hurricane hit Louisiana and also brought heavy rain and flooding to New Jersey and New York.
  • Total loss: $75 billion
  • Deaths: 107

Floods in Germany and Belgium July 2021

  • Between July 12-15 2021, intense rainfall caused record river levels and left a trail of destruction, mainly in Belgium and Germany but also in Austria, Switzerland and the Netherlands.
  • Total loss: 40 billion euros
  • Deaths: 230

Typhoons Faxai and Hagibis in Japan Aug-Oct 2019

  • The two typhoons hit central and eastern Japan, with Faxai causing 900,000 homes to lose power, while more than seven million people were told to evacuate due to Hagibis.
  • Faxai loss: $9.1 billion
  • Hagibis loss: $17 billion
  • Hagibis deaths: 85
  • Total loss: $26.1 billion

European heatwave summer 2022

  • Central Europe suffered three heatwaves over the course of the summer, including the hottest temperature so far measured in Britain at 40.3 degrees Celsius (104.54°F).
  • Total loss: more than 10 billion euros ($10.43 billion)
  • Deaths: 1,500 as a result of excess heat

Northwestern U.S. and British Columbia Canada heatwave June-July 2021

  • An extreme heatwave from June 25 to July 1 across western Canada and the U.S. Pacific Northwest, caused many wildfires.
  • Total loss: $8.9 billion
  • Fatalities: 1,400 as a result of excess heat

Pakistan floods June-Aug 2022

  • Intense monsoon rains and unusual heat in the Karakoram Mountains led to unprecedented glacial melt, starting floods on June 14. Floodwaters in flat-lying Indus floodplains took months to recede. The floods displaced eight million people.
  • Total loss: $3 billion
  • Deaths: 1,717