Global warming: Munich Re: billions in losses from natural disasters

According to calculations by Munich Re, hurricanes, floods and other natural disasters caused significantly above-average damage amounting to $320 billion worldwide in 2024. The geoscientists of the DAX group see an increasingly clear connection with climate change, as warm temperatures promote the development of storms. “The world is hotter than ever before,” said chief climatologist Tobias Grimm. “And that causes stronger storms, storms and also floods.”

“It is becoming increasingly clear that climate change plays a major role”

The $320 billion is the total global economic damage, of which $140 billion was insured. According to calculations by Munich Re, the figures are significantly higher than the inflation-adjusted average values ​​of the past decades: on a thirty-year average, the annual total losses are $181 billion, and on a ten-year average they are $236 billion.

According to Munich Re, 2024 was the third most expensive year since 1980 in terms of insured losses, and 2024 is in fifth place in terms of total losses. “Not every storm can be attributed to climate change,” said Grimm. “But it is becoming increasingly clear that climate change plays a major role.”

Munich Re has been documenting global losses from natural disasters for decades, as this is an important factor in calculating insurance premiums; As the world’s largest reinsurer, Munich Re acts as insurance for insurers. For consumers and companies, the long-term trend of increasing losses means that building insurance and other policies that cover storms and other natural disasters are also becoming more expensive.

Everyday storms are also becoming more frequent

When it comes to natural disasters, insurance companies differentiate between “peak perils” – such as major hurricanes or earthquakes – and everyday risks such as thunderstorms and floods (non-peak perils). “In 2024 we had both: both very damaging hurricanes and a series of storms and floods,” said Grimm. “And that explains why in 2024 we will be significantly above last year’s and also above the long-term average claims.”

Greatest damage in North America

The region of the world that is regularly hit hardest by natural disasters is North America. 2024 was no exception with $190 billion in economic damage. “This was due to both hurricanes and an extremely damaging severe weather season, especially a high number of tornadoes,” said Grimm. The two hurricanes “Helene” and “Milton” alone destroyed assets totaling 94 billion euros. The current devastating forest fires in California naturally do not appear in last year’s loss statistics, but Munich Re’s geoscientists count the densely populated US state as one of the high-risk areas in which climate change is increasing the risk of devastating forest fires.

Europe is not spared

But there is also a long-term trend in Europe where there is an increase in natural catastrophe damage, as Grimm said. Munich Re put the total losses in Europe last year at 31 billion dollars, of which 14 billion were insured. “The floods in Valencia in Spain alone caused over 4 billion dollars of insured damage,” said the scientist.

“This is also a realization: Such extreme weather events do not stop anywhere; they can also occur in regions where comparable damage was not previously known.” Grimm cited the floods in Dubai last April as an example – normally there is little rain in the desert state. “Climate change is showing its claws. It can have an impact and be felt everywhere,” said Grimm.

The death toll is comparatively low

However, the global death toll last year was below average at 11,000, as Grimm said. This is partly due to chance – there was no devastating earthquake last year like the one in Turkey and Syria in 2023. But it also shows “that prevention works,” said the scientist. This refers to the fact that many countries – for example in East and Southeast Asia – have significantly expanded their protective measures against typhoons and earthquakes in recent decades.

Oceans remain unusually warm

Long-term natural disaster forecasts are not possible, but the conditions for a lively hurricane season next summer are in place: the water temperatures in the world’s oceans are exceptionally high in long-term comparison. “Ocean temperatures are an important driver for the formation of tropical cyclones,” said Grimm. “The warmer the oceans are, the more water can evaporate and the heavier it can rain. At the moment there are no signs that the oceans are cooling down again.”