China suffered around USD 25 billion of losses from floods in 2021 -- the world's second-worst after Europe, data from the Zurich-based firm's latest research report showed.
Europe endured more than China and recorded over USD 41.8 billion of flood-related losses when extreme rainstorms hit Germany and neighbouring nations in July, according to the Swiss Re Institute.
The report said natural catastrophes in 2021 resulted in a total global economic loss of USD 270 billion and insured losses of USD 111 billion, the fourth-highest on sigma records.
This continues the long-term trend of insured losses increasing by an average of 5-7 per cent annually worldwide.
While Hurricane Ida was the costliest single natural disaster in 2021, secondary peril events once again accounted for the majority of insured losses from natural catastrophes over the year. The flooding in Europe in July, for example, was the costliest natural disaster on record in the region. Despite record-level insured losses from floods, the associated global protection gap remains large.
"Floods affect nearly a third of the world population, more than any other peril. In 2021 alone, we witnessed more than 50 severe flood events across the world," said Martin Bertogg, Head of Catastrophe Perils at Swiss Re. "Given the scale of devastation, flood risk deserves the same attention and risk assessment rigour as primary perils such as hurricanes."
According to the report, climate change is anticipated to cause more frequent and more extreme weather events. Growing populations, rapid urban development and the accumulation of economic wealth in disaster-prone areas are contributing to the ever-growing catastrophe losses.
The report said 2021 was another year of intense natural catastrophe activity, including devastating floods in Europe, China, the US, and other parts of the world. Already in the first quarter of 2022, major flooding in eastern Australia has caused widespread devastation and substantial insured losses.
"Growing losses from floods are becoming ever more apparent," said Jerome Jean Haegeli, Swiss Re's Group Chief Economist. "Last year we had another wake-up call. There is a growing urgency for action to increase the resilience of societies worldwide. Together with the public sector, re/insurers are well equipped to steer development away from high-risk areas and invest in protective measures such as green infrastructure. This keeps assets insurable while also improving the growth outlook."
Sigma records show that flooding is by far the most frequently occurring natural peril. In the past decade, there were approximately three times as many major flood events as tropical cyclones. Floods were also causing more than a third of all fatalities related to natural catastrophes. Economic losses from floods amounted to 23 per cent, the second highest after tropical cyclones.
Yet Swiss Re Institute finds that over the past decade, only 5 per cent of severe flood losses were insured in emerging markets and 34 per cent in advanced economies, indicating a large global protection gap. The largest gap in flood protection is in Asia, with only 7 per cent of economic losses being covered by insurance. By contrast, in Europe 34 per cent of flood losses are insured.
( With inputs from ANI )
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