Weather events intensified by climate change resulted in a direct economic cost of $360 billion in 2022, with only around 40 percent covered by insurance providers, reinsurance broker Gallagher Re said on Monday, saying the costliest event outside the US were devastating floods in Pakistan last summer.
Of the $360 billion, total insured losses were estimated at $140 billion, with private insurers covering $125 billion and public insurance entities covering $15 billion, making 2022 the fifth since 2017 to cross the $100 billion threshold for insurers, the London-based broker said in an annual report.
Hurricane Ian led the cost of damages in the United States. The storm resulted in nearly $55 billion in losses for public and private insurance entities, and an overall economic loss of $112 billion in the United States alone.
According to a report earlier this month by the US National Centers for Environmental Information, there were 18 separate weather and climate disaster events in the country last year that exceeded $1 billion each in losses.
Outside the United States, the costliest event and most consequential from a humanitarian perspective were the monsoon floods in Pakistan, with a World Bank report estimating a $15 billion economic loss due to direct physical damage, Gallagher Re’s report highlighted.
The 27th United Nations Climate Change Conference, COP27, saw the first discussion of a ‘loss and damages’ fund for countries predominantly affected by weather events exacerbated by climate change.
To “complement, not replace” those efforts, a “V20” group of 58 vulnerable countries and the G7 group of rich nations launched an effort called “Global Shield,” aimed at strengthening insurance and disaster protection finance, with Pakistan in the initial list.
