Munich Re: Insured 2020 Natural Catastrophe Losses Hit $82 Billion on Hurricanes, Wildfires
U.S. share was higher in 2020 as natural disaster losses accounted for $67 billion of insured losses, compared with $26 billion a year ago.
- David Pilla
- February 2021
A record hurricane season and “historic” wildfires fueled $82 billion in 2020 insured losses from natural catastrophes, according to Munich Re.
There was a record number of storms in the North Atlantic, along with historic wildfires in the western United States, the reinsurer said in a statement.
Natural disasters worldwide produced overall losses of $210 billion, with insured losses of $82 billion in 2020. Both figures were higher than 2019's overall losses of $166 billion and insured losses of $57 billion.
According to Munich Re, floods in China caused the highest event loss at $17 billion, but only about 2% of that was insured.
“Natural catastrophe losses in 2020 were significantly higher than in the previous year,” said Torsten Jeworrek, a member of Munich Re's board of management, in a statement.
“Record numbers for many relevant hazards are a cause for concern, whether we are talking about the severe hurricane season, major wildfires or the series of thunderstorms in the U.S.”
Jeworrek said climate change will play an increasing role in all of these types of disasters.
Munich Re said the U.S. share of natural disaster losses was significantly higher in 2020 as the United States accounted for $67 billion of insured losses compared with $26 billion a year ago. Overall losses rose to $95 billion from $51 billion in 2019.
Six of the 10 costliest natural disasters in 2020 were in the United States, Munich Re said. The most destructive event was Hurricane Laura, a Category 4 storm that made landfall on Aug. 27 in western Louisiana. Laura caused substantial wind and storm surge damage and triggered widespread flooding. Insured losses totaled $10 billion, and overall losses were $13 billion.
Risk modeler RMS said onshore and offshore insured losses from Hurricane Laura could range from $10 billion to $15 billion.
The hurricane season in the North Atlantic saw a record-setting 30 storms, 13 of which reached hurricane status, Munich Re said. The previous record year of 2005 had 28 storms and 15 hurricanes.
“The U.S. landfall record was shattered as well, with 12 tropical cyclones making landfall in one season,” Munich Re said. “The previous record was nine.”
Overall losses from the hurricane season in North America came to $43 billion, of which $26 billion was insured.
A series of large wildfires across the western United States in 2020 caused total losses of $16 billion, of which $11 billion was insured, Munich Re said.
The wildfires included record-setting fires (in terms of area burned) in California and Colorado. Munich Re said drought conditions, particularly across northern California and the Pacific Northwest, helped fuel dozens of large fires.
As of the beginning of December 2020, Munich Re said, California had 9,600 wildfires. The severity and extent of the largest fires damaged or destroyed around 10,500 structures.
The area burned by wildfire in the state was over four times larger than the 2015–2019 average.
“It was notable that damaging wildfires occurred not just in California, but across the rest of the western U.S. as well,” Munich Re said.
“Colorado saw its three largest fires, in terms of acres burned, in 2020. Wildfires in Washington and Oregon also set new records. In Oregon alone, about 4,000 homes were damaged or destroyed by wildfires, becoming one of the worst natural disasters in the state's history.”
In Asia, losses from natural disasters were lower than in 2019, Munich Re said. Overall losses were $67 billion, down from $77 billion in 2019. Insured losses fell to $3 billion from $18 billion.
In the Northwest Pacific, tropical cyclone Haishen was the first super typhoon of the 2020 Pacific season. It made landfall on Sept. 7 on the coast of South Korea. Overall losses were $1.2 billion, of which $800 million was insured, said Munich Re.
Natural disaster figures were “relatively benign” in Europe in 2020, said Munich Re. Overall losses were $12 billion, with insured losses of $3.6 billion.