Cost of extreme weather and natural disasters around £1.55tn in last decade

The impact of extreme weather events and natural catastrophes has resulted in approximately £1.55tn ($2tn) in economic losses since 2014.

This was according to a report released today (29 April 2024) by Zurich, entitled Climate risks – strategies for building resilience in a more volatile world.

The report showed that global insured natural catastrophe losses have risen steadily as a percentage of global gross domestic product (GDP), from 0.04% in 1994 to 0.1% in 2023 – equating to 2023 insured losses of roughly £82bn.

Data also showed that the frequency of events such as hurricanes, floods and wildfires is increasing, with 1.6bn people directly affected over the past 10 years.

Urgent action

Zurich said the growth emphasises “urgent need for coordinated action against the rising threats posed by extreme weather and natural catastrophes”.

The report proposed three key efforts the sector could coordinate to reduce that impact – investing in risk prevention and reduction, enhancing insurance accessibility and affordability through supportive policy frameworks and developing public-private risk-sharing propositions to raise finance climate resilience.

Alison Martin, chief executive of EMEA and bank distribution at Zurich, said: “The insurance industry is uniquely positioned to help strengthen resilience to physical climate risks.

“However, addressing the escalating costs of extreme weather and natural catastrophes requires collective and immediate action.

“Our paper provides a roadmap for how governments, insurers and communities can collaborate to meet the growing challenges posed by extreme weather and natural catastrophes.”