Addressing the Urgent Need for Climate Risk Mitigation and Adaptation Measures: Insights from Swiss Re’s 2023 Report

Swiss Re’s latest report highlights the urgent need for adaptation measures and climate risk mitigation as global insured losses from natural disasters hit $108 billion in 2023. The year, which was the hottest on record, saw a significant increase in insured losses, with the company predicting a continued rise in the coming years.

The report points to the increase in property exposures in high-risk areas as a key factor contributing to the rise in insured losses. With climate change expected to exacerbate severe weather events in the future, the need for proactive measures to mitigate risks is more pressing than ever.

One of the most devastating events in 2023 was the earthquake in Turkey and Syria, which highlighted the protection gaps faced by many people worldwide due to low insurance penetration. The absence of a single peak natural catastrophe event like Hurricane Ian in 2022 meant that the accumulation of insured losses was driven by the frequency of medium-severity events.

Severe convective storms (SCS) were a significant contributor to insured losses in 2023, particularly in the U.S., with factors such as economic growth and changes in vulnerabilities driving losses higher. Swiss Re emphasizes the importance of enforcing building codes and discouraging settlement in disaster-prone areas to reduce future losses.

As natural catastrophe insured losses continue to outpace global economic growth, the report underscores the need for collective action to mitigate risks. Property owners, regulators, the insurance industry, and governments all have a role to play in investing in resilient infrastructure and incentivizing adaptation measures.

To read the full Swiss Re report and learn more about the implications of the rising insured losses from natural disasters, click here.