WEATHER DISASTERSWeather Disasters in U.S. Dominate Natural Disaster Losses in 2021

Published 10 January 2022

In 2021, natural disasters caused overall losses of $280bn, of which roughly $120bn were insured. Alongside 2005 and 2011, the year 2021 proved to be the second-costliest ever for the insurance sector (record year 2017: $146bn, inflation-adjusted). Overall losses from natural disasters were the fourth-highest to date (record year 2011: $355bn). Hurricane Ida was the year’s costliest natural disaster, with overall losses of $65bn (insured losses of $36bn). In Europe, flash floods after extreme rainfall caused losses of $54bn (€46bn) – the costliest natural disaster on record in Germany. Many of the weather catastrophes fit in with the expected consequences of climate change, making greater loss preparedness and  climate protection a matter of urgency.

Natural disaster losses increased substantially. Worldwide, natural disasters caused substantially higher losses in 2021 than in the two previous years, a Munich Re report says. Based on provisional data, storms, floods, wildfires and earthquakes destroyed assets worth $280bn. Losses in the previous year amounted to $210bn, while in 2019 they were $166bn. Roughly $120bn of losses were insured, which was also more than in the two previous years (2020: $82bn, 2019: $57bn). The insurance gap, in other words the uninsured portion, declined slightly due to a higher proportion of losses in the USA, but was still approximately 57 percent. Almost 10,000 people lost their lives in natural disasters in 2021, a death toll comparable with those of recent years.

Exceptionally high proportion of losses in U.S.
The USA accounted for a very high share of natural disaster losses in 2021 (roughly $145bn), of which some $85bn were insured. Both overall and insured losses were significantly higher than in the two previous years (Overall losses 2020: $100bn, 2019: $52bn; insured losses 2020: $67bn, 2019: $26bn). In detail:

In December 2021, a series of severe storms across several states in the central and southeastern USA led to exceptionally high losses, especially for the month of December. Dozens of violent tornadoes with wind speeds of up to 310 km/h (190 mph) carved a trail of devastation across six states. Especially hard hit was the town of Mayfield, Kentucky, where a long-track, massive wedge-type EF4 tornado roared through the neighborhood. Large parts of the town, including a candle factory, were completely destroyed. According to initial estimates, overall losses amount to around $5.2bn, with projected insured losses of $4bn. An estimated 90 people were killed.

Tropical Storms: The Atlantic Hurricane Season
The costliest natural disaster in 2021 was Hurricane Ida, which made landfall on 29 August 90 km south of New Orleans as a major hurricane (Category 4, the second-most destructive), with wind speeds of around 240 km/h (150 mph). Tens of thousands of buildings were damaged or destroyed. The New Orleans levee system, which was strengthened following Hurricane Katrina in 2005, withstood the storm surges, thereby preventing much higher losses.