Climate Change Cost the World $150B in 2019. Natural Disasters Are Only Getting More Expensive.
Natural disasters are getting more expensive as climate change persists.
The year 2019 saw natural disasters across the globe with direct links to climate change, resulting in a steep economic cost.
Wildfires, floods, and hurricanes caused or fueled by climate change cost the world $150 billion last year, and the frequency of natural disasters is only expected to increase in 2020, according to a report issued by the German reinsurance company Munich Re.
The report claims there were approximately 820 natural disasters worldwide in 2019 alone. While this number is only marginally lower than the number of disasters in 2018, it is still significantly over the long-term average of 520.
“We expect 2020 to be part of this trend toward increasing losses from weather-related disasters, a trend that we have been observing over the last decade,” Munich Re’s chief climatologist Ernst Rauch told CNN.
Having studied the world’s climate for decades, Munich Re has noticed a surge in thunderstorms in Europe and North America over the years, followed by hail, flooding, and tornadoes, due to climate change.
The severity of the recent bushfires in Australia is also a result of climate change, according to Rauch.
“What climate change does is change probabilities, so if we see an increasing probability of large losses from wildfires that indicates that climate change is contributing,” he said.
Insurance losses from Australian bushfires increased to $481 million this season, the Insurance Council of Australia reported Tuesday. Insurance companies have received around 9,000 insurance claims since the beginning of September and are anticipating many more to come as fires across Australia continue to destroy both property and lives.
The world’s largest losses in 2019 were caused by Japan’s typhoons, which cost insurance providers a hefty $52 billion, followed by Cyclone Idai in Mozambique, which killed 1,000 people and cost a total of $2.3 billion.
“The typhoon season shows that we must consider short-term natural climate variations as well as long-term trends due to climate change,” Rauch said.
“In particular, cyclones are becoming more frequently associated with extreme precipitation, as with Hagibis in Japan in 2019 and Hurricane Harvey in 2017 in the US," he added. "Recognizing these changes can form the basis for further preventive measures to reduce losses.”
While more people in developed nations continue to take out insurance for natural disasters, the increasing destruction from frequent weather-related catastrophes will only cause insurance premiums to climb. Meanwhile, insurance penetration — meaning insurance premiums as a percentage of GDP — in the developing world has yet to grow, according to Rauch.