2024 was one of the costliest years on record for insurance companies and the world, as natural disasters caused hundreds of billions of dollars in damages.
What's happening?
According to German insurance company Munich RE, natural catastrophes in 2024 were responsible for $140 billion in insured losses, making it the third-most expensive year since 1980.
Weather events accounted for 97% of that total and 93% of the $320 billion in overall global economic losses from last year, which ranks fifth-highest since 1980.
Not only did those losses far exceed the numbers from 2023 by $34 billion and $52 billion, respectively, but they were also "considerably higher than the inflation-adjusted averages of the past 10 and 30 years."
Non-peak perils, such as floods, wildfires, and thunderstorms, "increasingly [fueled] the trend of rising losses," as they generated total damages worth $136 billion, with $67 billion of that amount insured.
Meanwhile, tropical cyclones were responsible for $135 billion in total losses and $52 billion in insured losses. Hurricanes that struck the U.S. accounted for the majority of those figures, totaling $105 billion for overall losses and $47 billion for insured losses.
"One record-breaking high after another — the consequences are devastating," said Thomas Blunck, member of the Board of Management at Munich RE. "The destructive forces of climate change are becoming increasingly evident, as backed up by science."
Why are these sky-high losses concerning?
The steep economic losses from extreme weather events are a direct consequence of Earth's annual average temperature hitting 1.5 degrees Celsius above pre-industrial levels for the first time ever.
Munich RE cited studies from World Weather Attribution that found that climate change increased the devastating effects of Hurricanes Helene and Milton. The former resulted in the largest overall loss of 2024 at $56 billion, while the latter produced the highest insured loss of 2024 at $25 billion.
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Move somewhere else 🌎 The WWA also reported that rising global temperatures increased the likelihood of extreme flooding in Brazil and Valencia, the latter of which dropped a year's worth of rain in a single day and ended up as the most financially devastating event in Europe.
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Examples like these have driven up insurance premiums to unmanageable levels, with some homeowners paying absurdly high rates or getting dropped altogether.
"Everyone pays the price for worsening weather extremes, but especially the people in countries with little insurance protection or publicly funded support to help with recovery," Munich RE's Chief Climate Scientist Tobias Grimm said. "The global community must finally take action and find ways to strengthen the resilience of all countries, and especially those that are the most vulnerable."
What's being done about the planet's overheating?
All is not lost, though, as experts worldwide are working on solutions that could help mitigate the effects of Earth's overheating and the extreme weather conditions associated with it.
One Australian startup has figured out how to slash methane produced by cows, while researchers from Switzerland have developed battery technology that could improve electric vehicle performance.
Individuals also play a critical role in our collective effort to create a cooler planet, whether it's investing in efficient home energy systems or switching from single-use plastic products to reusable items.
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