Global economic losses from natural and man-made disasters amounted to $ 280 billion in 2021, of which $ 119 billion was insured, according to a report Wednesday by Swiss Reinsurance Co. Ltd.
The $ 280 billion loss was the sixth highest ever, according to Swiss Re sigma research, and the 16th highest since 1970 after normalizing for GDP growth effects. The insured losses of $ 119 billion were the fourth highest ever and included $ 111 billion in compensation for damages due to natural disasters.
Natural disasters accounted for $ 270 billion of total economic losses, including more than 50 severe flood events globally, Swiss Re said.
While global economic losses from floods reached $ 82 billion, only $ 20 billion was insured. The fact that floods accounted for 31% of global economic losses from natural disasters in 2021, only 2 percentage points less than tropical cyclones, clearly illustrates the significant threat posed by flood losses.
“Floods affect almost a third of the world’s population, more than any other danger. In 2021 alone, we witnessed more than 50 serious flood events worldwide,” said Martin Bertogg, Head of Disaster Risk at Swiss Re, in a statement issued with the report. “Given the scale of the devastation, flood risk deserves the same attention and risk assessment as primary hazards such as hurricanes.”
Floods and other so-called “secondary risk events” accounted for the majority of the insured losses from natural disasters in 2021, said Swiss Re, noting that the floods in Europe in July were the most expensive natural disaster ever committed in the region.
Over the past five years, multi-billion dollar insured losses from secondary risk events such as severe convective storms, floods and forest fires have occurred regularly.
In 2021, for the first time, two separate secondary risk events – the Uri winter storm in the United States and the devastating floods in Europe – each caused a loss of over $ 10 billion.
“Increasing flood losses are becoming increasingly apparent,” said Jérôme Jean Haegeli, chief economist of the Swiss Re Group, in the statement, calling 2021 “a new alarm clock.”