Global insurance losses from extreme weather fueled by climate change topped $100 billion in 2021, according to a new report, the fourth time that threshold has been crossed in the last five years.
"The top ten most expensive events financially all cost over 1.5 billion dollars of damage with Hurricane Ida in the U.S. topping the list at $65 billion," stated a report released Monday by the British nonprofit Christian Aid. "The floods in Europe came second at $43 billion."
Along with Hurricane Ida, which made landfall in Louisiana as a Category 4 storm on Aug. 29 before cutting a path of destruction across much of the eastern United States, the July floods that struck much of Western Europe in July resulted in $43 billion in insurance losses. The Texas winter storm in February that disabled much of the state's electrical grid caused $23 billion in losses, while July's catastrophic flooding in China's Henan province accounted for $17.6 billion in losses. Rounding out the five-biggest extreme weather insurance losses of 2021 was the flooding that resulted from record-setting rainfall in British Columbia, Canada, in November that tallied $7.5 billion in losses.
Climate scientists have linked the rising intensity of hurricanes and speed at which they develop to warmer ocean and air temperatures caused by climate change. Research has shown that climate change is destabilizing the jet stream, unleashing polar vortexes like the one that hit Texas. Studies have also shown that for every degree Celsius of warming, the planet’s atmosphere holds an additional 7 percent more moisture, making extreme rainfall events more likely.
In its own analysis released earlier this month, Swiss Re, an insurance firm based in Zurich, noted that massive extreme weather losses have become commonplace.
“In 2021, insured losses from natural disasters again exceeded the previous ten-year average, continuing the trend of an annual 5–6% rise in losses seen in recent decades. It seems to have become the norm that at least one secondary peril event such as a severe flooding, winter storm or wildfire, each year results in losses of more than USD 10 billion,” Martin Bertogg, an executive at Swiss Re, said in a statement. “At the same time, Hurricane Ida is a stark reminder of the threat and loss potential of peak perils. Just one such event hitting densely populated areas can strongly impact the annual losses.”
In 2021, extreme weather events once again struck densely populated areas with alarming frequency. Those effects will continue as humankind continues to pump greenhouse gases into the atmosphere, causing global temperatures to creep higher each year, scientists warn.
As a result, future annual insurance losses exceeding $100 billion are all but guaranteed if the world continues on its current warming trajectory, the Christian Aid report warns.
"Unless the world acts rapidly to cut emissions these kinds of disasters are likely to worsen. Steve Bowen, meteorologist and head of catastrophe insight at insurers Aon has noted that 2021 is expected to be the sixth time global natural catastrophes have crossed the $100 billion insured loss threshold," the report stated. "All six have happened since 2011 and 2021 will be the fourth in five years."