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Devastating earthquakes, catastrophic floods, record-breaking��wildfires, and severe convective storms (SCS)��have shunted natural catastrophe three places up the risk��radar for 2024.

The year’s costliest nat cat events were the M7.8 and M7.5��earthquakes that struck Turkey and Syria in February,��causing insured losses of over $6bn, as well as a tragic loss��of human life [1].

Total economic losses from nat cat in 2023 are estimated��to be $260bn, according to analysis by Swiss Re. A high��number of low-to-medium-severity events added up��to insured losses that will exceed $100bn for the fourth��consecutive year, with SCS the main contributor. Often��referred to as a ‘secondary’ peril, SCS resulted in insured��losses that reached an all-time high of $60bn in 2023 –��almost 90% more than the previous five-year average of��$32bn. The US, which is particularly prone to such storms,��experienced 18 events that each incurred insured losses��of $1bn and above, with total insured losses for SCS��exceeding $50bn for the first time [2].

Around the world, nat cat was the #1 risk in Croatia,��Greece, Hong Kong, Hungary, Malaysia, Mexico, Morocco,��Slovenia, and Thailand, and ranked in the top three for��many countries, such as the US, the UK, Australia, Japan,��and Turkey.

“It’s no surprise most of the countries which rank the risk��of natural catastrophes and the related peril of climate��change the highest are those that sustained some of the��most significant events of the year,” says Mabé Villar��Vega, Catastrophe Risk Research Analyst, �ǿմ�ý��Commercial. “The increasing influence of changing��climate conditions boosted the development of certain��events in 2023, and nat cat is now the cause of business��interruption businesses fear the most (44% of responses)��after cyber incidents.”

2023 is believed to be the hottest year on record, with��heatwaves or droughts afflicting areas of southern Europe,��the US, Canada, Central and South America, North��Africa, and Asia. Sustained dry conditions intensified and��contributed to the spread of wildfires in many regions,��including Canada, which recorded its most destructive��wildfire season, and Greece, where a wildfire near the city��of Alexandroupolis became the largest in the European��Union’s recorded history. In Maui, Hawaii, the deadly��Lahaina wildfire is estimated to have caused economic��losses of $5.5bn, with insured losses of $3.4bn [3].

Elsewhere, catastrophic flooding was recorded in many��regions, including Hong Kong, China, India, Libya, the��Great Lakes of East Africa, Slovenia, and Italy. Heavy��rainfall in Italy’s Emilia-Romagna region racked up insured��losses of $600mn, making it the costliest weather-related��event in the country since 1970 [4]. In the US, a series of��‘atmospheric rivers’ – regions in the atmosphere that carry��water – brought heavy rain to California, Nevada, Arizona,��and Utah between January and March, with economic��losses estimated at over $3.4bn [5].

Exceptionally warm sea surface temperatures in the��North Atlantic led to an above-average hurricane season,��despite initial forecasts pointing to more subdued activity��– 20 named storms meant this was the fourth highest��total in a year since 1950 [6]. Hurricane Idalia was the most��significant event, registering insured losses of $3.5bn [7].

The effects of the El Niño climate pattern contributed��to intensified tropical cyclone activity in the Western��North Pacific, the most significant event being Tropical��Cyclone Doksuri, which caused economic losses of $20bn��in mainland China [8]. In the eastern Pacific, Tropical Storm��Hilary affected California and Mexico, while Hurricane Otis��caused widespread damage to Acapulco in Mexico.

A series of hailstorms in July set a record for the largest��European hailstone – 19cm in Italy – during a number of��extreme-weather events believed to have caused $1.1bn��insured losses and $4bn economic losses [9]. “Hailstorms are��deemed a secondary peril, but they are intensifying and can��drive severe losses,” says Villar Vega. “In August, Hailstorm��Denis in southern Germany damaged roofs, windows and��even the interiors of many properties (insured losses from��this event were estimated at $230mn [10]).

“Nat cat events, particularly those related to weather and��climate, are expected to increase and therefore they will��have an impact on the insurance industry, from model��updates to pricing and underwriting strategies. Resilience��and business continuity plans must be prioritized for 2024,”��Villar Vega concludes.