Insurance losses from natural disasters in the first half of 2024 were greater than the gross domestic product of more than half the countries in the world. It’s a staggering figure, especially since it excludes losses from other events, such as wars. The short lead times and unpredictability of climate events make risk mitigation challenging for insurers. For 50 years, both reported climate events and insured losses have trended steadily upward. Analyzing the correlation between these trends requires further study, including the roles of improved reporting and valuation changes. For now, the clear takeaway is that insurance costs will likely keep rising and ultimately pass down to consumers.
The Financial Cost of Climate Change
Climate events and insured losses have trended steadily upward for 50 years.
Special Collection – The Middle East