Natural perils had a total direct economic cost of $417 billion in 2024. (Credit: cherylvb/Adobe Stock)
Natural catastrophes caused global insured losses of $154 billion in 2024, a number that’s 27% above the 10-year average, according to a new report from Gallagher Re.
The report estimates that natural perils had a total direct economic cost of $417 billion in 2024. Private and public insurance entities covered 37% of that total, with the United States alone accounting for $117 billion in insured losses.
Between 2014 and 2023, annual global insured losses averaged $121 billion, but between 2017 and 2024, the average was $146 billion. The report suggests this indicates a new normal, with global insured losses of about $150 billion per year.
In an interview with PropertyCasualty360, Steve Bowen, chief science officer at Gallagher Re, said climate change is a big factor in the uptick. According to multiple global weather and climate agencies, 2024 was the warmest year on record since 1850 and potentially the warmest year in the last 125,000.
“2024 was another very active year,” he said. “We’re seeing more and more of these high-impact events, and we’re certainly seeing the fingerprint of climate change in all of these events.”
Despite the high losses of recent years, Bowen said insurers and reinsurers have gotten better at weathering the changing climate, thanks to significant amounts of capital and better approaches to risk management.
“The industry is in much better shape now to identify the risk, absorb the losses coming from this enhanced risk and, going forward, to be much more strategic in making decisions that ensure the health of the industry and make sure clients and customers are protected,” he said.
In 2024, there were at least 60 individual billion-dollar economic loss events — the fifth highest total on record. At least 30 of those events were also billion-dollar insured loss events. Last year also saw 21 multi-billion-dollar insured loss events, a new record.
Hurricanes Helene and Milton were last year’s costliest events. Helene had an economic loss of $78 billion, with $20 billion in insured losses. Milton had an economic loss of $35 billion, with $20 billion in insured losses.
Worldwide, 41% of insured losses — $64 billion — were from severe convective storms. In 2023 and 2024, severe convective storm events cost global insurers $143 billion, with $120 billion of those losses occurring in the United States.
The portion of natural catastrophes not covered by insurance – otherwise known as the protection gap – was 63%, or $263 billion, in 2024. Loss events in non-traditional insurance markets, like Typhoon Yagi in Asia ($17 billion in economic losses), the Arabian Gulf flash floods ($8.6 billion in economic losses) and the Rio Grande do Sul floods in South American ($15 billion in economic losses), indicate growing global risk.
“There’s growing exposure, and it’s not just in mature insurance markets,” Bowen said. “There truly is a global risk that we need to be considering.”
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