Hurricanes, Severe Thunderstorms and Floods Drive $100 bn Insured Losses

2024 is set to become the hottest year on record, with temperatures 1.54°C above the pre-industrial average. The warming climate has intensified natural catastrophes throughout the year. Europe faced severe flooding, leading to the region’s second-highest insured flood losses ever, based on Swiss Re Institute estimates.

In the US, two major hurricanes and frequent severe thunderstorms accounted for at least two-thirds of the year’s global insured losses, which currently exceed $135 bn.

Balz Grollimund, Head of Catastrophe Perils at Swiss Re, highlighted: “For the fifth consecutive year, insured losses from natural catastrophes have surpassed $100 bn. Rising losses are driven by growing value concentration in urban areas, economic expansion, and higher rebuilding costs. Climate change is increasingly contributing to catastrophe risks, underscoring the need to prioritize mitigation and adaptation measures.”

• Estimated insured losses from natural catastrophes on track to exceed $135 bn in 2024
• Hurricane Helene and Hurricane Milton severely impacted the US, resulting in estimated insured losses approaching $50 bn
• Major floods hit Europe and the Middle East, causing estimated insured losses of close to $13 bn as of today

Flood risk is rising globally

Flood risk continues to grow worldwide. Severe flooding in Europe and the UAE in 2024 resulted in nearly $13 bn in insured losses. Europe alone recorded $10 bn in insured losses, making it the second-costliest year for the region and the third-costliest globally for flood-related events, according to Swiss Re estimates.

Intense precipitation in April caused floods in the Gulf region, disrupting the operations of the world’s busiest airport of Dubai. In September, Storm Boris caused major floods in Central Europe, mainly affecting the Czech Republic, Poland and Austria. Additional impacts were reported from Slovakia, Romania, Italy and Croatia.

While so-called Vb lows – slow-moving, low-pressure systems – are nothing unusual in the region, the strong intensity of the Vb system connected to Storm Boris is favoured by conditions related to climate change.

Storm Boris mixed cold Arctic air flowing southwards with unusually warm air from the east and south, drawing moisture from a record-breaking warm Mediterranean Sea.

In October, large parts of Spain experienced heavy rainfall, flash floods and hailstorms, which caused severe damage. The floods were worst in eastern and southern Spain, with most of the damage across the Valencia and Castilla-La Mancha regions (see European System for Natural Catastrophe Risk Management & Re/Insurance).

Andalusia and the Balearic Islands were also affected. One year’s average precipitation was dumped in less than eight hours in many locations. Steep clay terrain and drainage systems could not absorb the exceptional amount of water, leading to fast overflows.

Pluvial Floods and Their Impact on Urban Areas

Floods occur in different forms, with fluvial, pluvial, and storm surge floods being the most common. Fluvial floods result from heavy rainfall and typically impact areas near rivers. These floods can develop gradually or suddenly, lasting for extended periods. In contrast, pluvial floods can happen anywhere, especially in urban areas.

They occur after intense rainfall over a short time, overwhelming drainage systems and causing flash floods. This happens because urban surfaces are often sealed and prevents water absorption.

Additionally, floods can arise as secondary effects from primary perils, such as storm surge and rainfall during tropical cyclones.

The economic development has been a key driver of rising insured flood losses for decades. However, Swiss Re warns that protection gaps could remain significant unless there is greater focus on adaptation and adequate insurance coverage to boost financial resilience.

Economic development continues to be the main driver of the rise in insured losses resulting from floods, but also other perils, seen over many decades. However, with natural catastrophe risks rising and higher price levels, the annual increase of 5–7% in insured losses will continue, and protection gaps could remain high.

Jérôme Jean Haegeli, Group Chief Economist at Swiss Re

Climate change is expected to worsen flood-related losses as extreme weather events intensify. Urban sprawl further raises risks by increasing asset values in vulnerable areas.

Adaptation measures, such as dykes, dams, and flood gates, are critical. These protective structures can be up to ten times more cost-effective than post-disaster rebuilding efforts.

Hurricanes and severe thunderstorms, with US hardest hit

At least two thirds of this year’s insured losses are attributable to the US: Two major hurricanes made landfall within a fortnight on the coast of Florida in September and October this year. Hurricane Helene made landfall as a major hurricane on 27 September, followed by Hurricane Milton on 9 October.

Insured losses from both hurricanes are expected to amount to below $50 bn as of today. Additionally, 2024 experienced a high frequency of severe thunderstorms (severe convective storms, or SCS), which affected mostly the US.

Insured losses from SCS are expected to add more than $51 bn globally for 2024 as of today, the second-highest loss after the record high of approximately $70 bn in 2023.

Estimated total economic and insured losses

These sigma catastrophe loss estimates refer to property damage and exclude claims related to COVID-19. Loss estimates in this press release are preliminary and are subject to change as not all loss-generating events have been fully assessed yet.

Insurers faced $51 bn in losses from North American hurricanes and Northwest Pacific cyclones in 2024, surpassing the 10-year average, according to Munich Re.

The 2024 tropical cyclone season brought “exceptionally severe storms,” driven by high sea surface temperatures linked to climate change.

Despite a typical number of tropical cyclones, rapid intensification and extreme rainfall characterized many storms, noted Thomas Blunck, a board member.

Initial estimates show North Atlantic hurricanes and Northwest Pacific typhoons caused $133 bn in total economic losses, with $51 bn insured. This exceeds the 10-year averages of $89.2 bn in total losses and $35.1 bn insured losses, as well as the 30-year averages of $62.2 bn and $23.7 bn, respectively.

In the North Atlantic, hurricanes resulted in $110 bn in total losses, with $49 bn insured. These losses rank among the costliest of the last decade, second only to 2017. Insured losses from all natural catastrophes in 2024 are projected to exceed $100 bn.

Aon’s work with Columbia University has revealed that under selected scenarios, U.S. hurricane losses would increase by at least 10% over 20 years as a result of changes in climatic activity.

This estimate does not account for increases in exposures as a result of non-climatic factors such as new development and inflationary momentum.

20 Most Costliest U.S. Hurricanes

These findings are based on evolving climate research and could be subject to revision as new insights are obtained.

The costliest typhoon in Asia – and the third-costliest cyclone of the season worldwide – was Typhoon Yagi. It struck the Philippines, the Chinese island of Hainan, and the southern tip of the Chinese province of Guangdong as an extreme storm before making landfall in the north of Vietnam on 7 September as a category 3 typhoon.

When it made landfall in China, Yagi even reached category 4 wind speeds – the second-highest category. For Vietnam, it was the strongest tropical cyclone since systematic records began in 1945. It also hit Myanmar, where over 400 fatalities were recorded.

Hundreds of thousands of homes were destroyed and millions of people were affected by Yagi’s impacts. Overall losses are estimated at $14bn; insured losses at $1bn.

However, the calm was shattered by an intense and costly late-season surge, marked by a series of devastating storms that drove up losses and caused widespread death and destruction.

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AUTHORS: Balz Grollimund – Head of Catastrophe Perils at Swiss Re, Jérôme Jean Haegeli – Group Chief Economist at Swiss Re