Global Natural Disaster Losses Hit US$310 Billion in 2024, Up 6%

In a year set to become the hottest on record, natural disasters have inflicted global economic losses of US$310 billion in 2024, a 6% increase from the previous year, according to Swiss Re. This marks the fifth consecutive year with insured losses exceeding US$100 billion.

Swiss Re reported that insured losses totaled US$135 billion, up 17% year-over-year, driven by devastating hurricanes in the United States and widespread flooding across Europe and the Gulf region. Hurricanes Helene and Milton alone caused nearly US$50 billion in insured losses in the southeastern United States, making the country responsible for two-thirds of the global total. Severe thunderstorms further compounded the financial toll.

Mexico ranks among the 10 countries most at risk from natural disasters, according to the United Nations, with 45% of its territory vulnerable to flooding. However, the country invests just 3.2% of GDP in risk mitigation, lagging behind peers such as Chile and Brazil.

Hurricane Otis emerged as Mexico’s third most expensive disaster for the insurance industry, with losses exceeding US$2.125 billion. As of October 2024, over 44,650 claims had been processed in Guerrero, the hardest-hit state. Insurers report that 72% of damages they cover are tied to hydrometeorological events like storms and hurricanes. Over the past two decades, Mexico’s three most devastating hurricanes have generated US$6.5 billion in insured losses.

Europe endured its second-costliest year for flood insurance, with US$10 billion in insured losses over the past 12 months. Major incidents included Central Europe’s September floods caused by Storm Boris and catastrophic flooding in Spain in October, triggered by Dana, which claimed more than 230 lives. In the Gulf region, severe flooding disrupted operations at Dubai International Airport, the world’s busiest hub for international travel.

Swiss Re identified climate change as a key factor amplifying the intensity and frequency of extreme weather events. Balz Grollimund, the company’s head of catastrophe and perils, stated, “By favoring the conditions leading to many of this year’s catastrophes, climate change is playing an increasing role.”

The European Union’s Copernicus Climate Change Service estimated that 2024's average temperature would exceed pre-industrial levels by 1.55°C. While this does not breach the Paris Agreement’s 1.5°C target on a decadal average, scientists warn that every fraction of a degree leads to increasingly severe and costly impacts.

Swiss Re attributed rising losses not only to climate change but also to urban sprawl, economic growth, and soaring rebuilding costs. The report emphasized the cost-effectiveness of adaptive measures like dykes, dams, and floodgates, which can be up to 10 times cheaper than post-disaster rebuilding. “Losses are likely to increase as climate change intensifies extreme weather events while asset values grow in high-risk areas,” the company cautioned. Swiss Re urged policymakers and businesses to invest in sustainable, long-term protective measures to mitigate future risks.