2023 Reflects a New Norm in Natural Catastrophe Insurance Losses

The year 2023 set a new standard in the realm of natural catastrophe insurance losses, surpassing $100 billion for the fourth consecutive year, with a record $108 billion in insured damages. This trend underscores a new norm, as insured losses from natural catastrophes continue to climb, driven primarily by an uptick in medium-severity events and an unprecedented $64 billion in losses from severe convective storms (SCS). The global economic losses from these catastrophes amounted to $280 billion, of which only 38% was insured, highlighting the significant protection gap that persists worldwide.

The most significant insured loss event of 2023 was the earthquake in Turkey and Syria, demonstrating the high variability of catastrophic events and the profound impact of low insurance penetration areas on the overall insurance landscape. The increasing frequency of natural disasters, coupled with the growth in property exposures, especially in catastrophe-prone areas, suggests that annual insured losses are likely to continue their upward trajectory.

Adaptation, insurance, and mitigation emerge as critical strategies to combat the rising natural catastrophe insurance costs. By enforcing building codes, building resilient infrastructure, and addressing climate change, stakeholders can work towards making natural catastrophe insurance more affordable and narrowing the global protection gap.