The reinsurer said the bulk of those costs, which were higher than the previous 10-year annual average of $79 billion, were from natural catastrophes, including hurricanes Laura and Sally and a derecho storm in the U.S. Total economic losses from natural and man-made catastrophes reached $202 billion, up from $150 billion in 2019.
A range of small to midsize disasters hit insurers and their clients last year, with insured losses from both bigger events and smaller ones that can happen more frequently increasing since 1970 -- with climate change having an impact, Swiss Re said in the report.
More than 70% of the insured losses from natural catastrophes last year were due to secondary perils, or natural catastrophes including snow, drought and flash floods that typically spur smaller losses. Those costs should serve as a reminder that future large losses could also increase, the reinsurer said.
“Last year the industry was spared major losses from the North Atlantic hurricane season, as most U.S. landfalls did not hit densely populated areas,” Swiss Re said. “This was down to luck. There is no reason that future landfalls will not strike areas of economic wealth. And, it was certainly no luck for those communities in Central America in the path of last year’s hurricanes but which without insurance, had no recourse to compensation.”