Natural disasters cost $210bn in 2020, the world's joint-hottest year

 Not a day passed after I posted the information on record losses from natural disasters in the U.S., another piece of information came about the global scale of the problem, which confirmed the trend.

Financial losses caused by natural disasters worldwide last year amounted to $210 billion in damage, a sharp increase from the $166 billion global bill in 2019, Munich Re said in an annual report.

The report came just a day before the European Union's Copernicus Climate Change Service said 2020 tied with 2016 as the world's warmest year on record, rounding off the hottest decade globally as the impacts of climate change intensified.

German reinsurance giant Munich Re on Thursday urged action to prevent climate change from bringing about more such hazards, after a record hurricane season and major forest fires last year.

The disasters claimed around 8,200 lives worldwide, the company said in its report, adding that the insured amount of damage came to $82 billion, or around 40 percent of the total.

"Climate change will play an increasing role in all of these hazards," said Munich Re board member Torsten Jeworrek. As part of the Paris Agreement five years ago, "the global community set itself the target of keeping global warming well below 2 degrees Celsius. It is time to act," he added.

According to Copernicus, in 2020, temperatures globally were an average of 1.25 degrees Celsius higher than in pre-industrial times. The last six years were the world's hottest on record.

The Paris Agreement aims to cap the rise in temperatures to "well below" 2 degrees Celsius and as close as possible to 1.5 degrees Celsius to avoid the most devastating impacts of climate change.

Floods and cyclones devastate Asia

The year's most costly individual event was the severe flooding in China, from May 21 to July 30, during the summer monsoon rains. Overall losses from the floods amounted to approximately $17bn, only around 2 percent of which was insured.

Overall in Asia, which recorded serious cyclones and floods, losses from natural disasters were lower than in the previous year at $67bn compared with $77bn in 2019.

 Highest losses suffered in North America

However, it was a completely different story in North America, as six of the 10 costliest natural disasters were in the U.S., which suffered the most active hurricane season on record in 2020. The North Atlantic season was "hyperactive," Munich Re said, with a record-setting 30 storms including 13 hurricanes.

In addition, once again, a series of large wildfires raged across the western U.S. in 2020, including record-setting fires (in terms of area burned) in California and Colorado. The area burned by wildfire in California was more than four times larger than the 2015–2019 average.

Copernicus said this California heatwave in August pushed the temperature at Death Valley in the Mojave Desert up to 54.4 degrees Celsius, the highest temperature ever reliably recorded.

Natural disasters in the U.S. accounted for $95bn (2019: $51bn) of overall losses, $67bn of which were insured (2019: $26bn).

 Minimal natural disaster losses in Europe

Things were looking more positive in Europe in terms of natural disaster figures for 2020 being relatively benign.

Localized extreme losses – which are typical for the fall season – were triggered by heavy rainfall along the Mediterranean coasts of southern France and Italy. And winter storms in February caused losses of $2.5bn in the continent.

In March, an earthquake with a magnitude of 5.3 struck the region north of Zagreb in Croatia, resulting in property losses totaling $1.8bn.

Overall losses in Europe came to $12bn, of which $3.6bn was insured.

Hot years and extreme temperatures continue in the Arctic Circle

However, according to Copernicus data, the continent also experienced its hottest year on record in 2020, after an exceptionally warm winter and fall.

The Arctic and northern Siberia continued to warm more quickly than the planet as a whole last year, with temperatures in parts of these regions averaging more than 6 degrees Celsius above a 30-year average used as a baseline, Copernicus said.

The region also had an "unusually active" wildfire season, with fires poleward of the Arctic Circle releasing a record 244 million metric tons of planet-warming carbon dioxide in 2020, over a third more than in 2019.

Arctic sea ice also continued to deplete, with July and October both setting records for the lowest sea ice extent in that month.

Scientists said these data and figures from natural disaster losses are consistent with growing evidence that climate change is contributing to more intense hurricanes, fires, floods and other disasters.

The year's extreme weather fits "with the expected consequences of a decades-long warming trend for the atmosphere and oceans that is influencing risks," Munich Re's chief climate scientist Ernst Rauch said.

"We need another dictionary to help us describe how these extremes continue to play out and unfold year after year," said Adam Smith, a climate scientist with the National Oceanic and Atmospheric Administration (NOAA).

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U.S. Disaster Costs Doubled in 2020, Reflecting Costs of Climate Change

The $95 billion in damage came in a year marked by a record number of named Atlantic storms, as well as the largest wildfires recorded in California.

 

 Hurricanes, wildfires and other disasters across the United States caused $95 billion in damage last year, according to new data, almost double the amount in 2019 and the third-highest losses since 2010.

The new figures, reported Thursday morning by Munich Re, a company that provides insurance to other insurance companies, are the latest signal of the growing cost of climate change. They reflect a year marked by a record number of named Atlantic storms, as well as the largest wildfires ever recorded in California.

 Those losses occurred during a year that was one of the warmest on record, a trend that makes extreme rainfall, wildfires, droughts and other environmental catastrophes more frequent and intense.

 “Climate change plays a role in this upward trend of losses,” Ernst Rauch, the chief climate scientist at Munich Re, said in an interview. He said continued building in high-risk areas had also contributed to the growing losses.

Topping the list was Hurricane Laura, which caused $13 billion in damage when it struck Southwestern Louisiana in late August. Laura was one of the year’s record number of 30 named storms in 2020; 12 of those storms made landfall, another record. The storms caused $43 billion in losses, almost half the total for all U.S. disasters last year.

In addition to the number of storms, the 2020 hurricane season was unusually devastating because climate change is making storms more likely to stall once they hit land, pumping more rain and wind into coastal towns and cities for longer periods of time, Mr. Rauch said.

The next costliest category of natural disasters was convective storms, which includes thunderstorms, tornadoes, hailstorms and derechos, and caused $40 billion in losses last year. The derecho that struck Iowa and other Midwestern states in August caused almost $7 billion in damage, destroying huge amounts of corn and soybean crops.

Wildfires caused another $16 billion in losses. Last year’s wildfires stood out not just because of the numbers of acres burned or houses destroyed, Munich Re said, but also because so much of that damage was outside of California. Some 4,000 homes were damaged or destroyed in Oregon alone.

The new numbers come as the insurance industry struggles to adjust to the effects of climate change. In California, officials have tried a series of rule changes designed to stop insurers from pulling out of fire-prone areas, leaving homeowners with few options for insurance.

Homeowners and governments around the United States need to do a better job of making buildings and communities more resilient to natural disasters, said Donald L. Griffin, a vice president at the American Property Casualty Insurance Association, which represents insurance companies.

“We can’t, as an industry, continue to just collect more and more money, and rebuild and rebuild and rebuild in the same way,” Mr. Griffin said in an interview. “We’ve got to place an emphasis on preventing and reducing loss.”

The data also shows another worrying trend: The lack of insurance coverage in developing countries, which makes it harder for people there to recover after a disaster.

The single costliest disaster of 2020 was a series of floods that hit China last summer, which according to Munich Re caused $17 billion worth of damage. Only 2 percent of those losses were insured, the company said.

Similarly, Cyclone Amphan, which struck India and Bangladesh in May, caused $14 billion of damage, “very little of which was insured,” according to Munich Re. Of the $67 billion in losses from natural disasters across Asia last year, only $3 billion, or 4.5 percent, was covered by insurance.

Without insurance, Mr. Rauch said, “the opportunity to recover fast after such an event is simply not there.”

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