$250 Billion – Global Cost Of Natural Disasters In 2023

Flood Philippines

Natural disasters including destructive thunderstorms and devastating earthquakes in 2023 cost the world around $250 billion in damages as climate change churned up dangerous and deadly weather across the globe, according to a new study by Munich RE, a multinational insurance provider based in Germany. The report has been issued this week.

The figure is similar to what was recorded in 2022 and is close to the average of the previous five years, but above ten-year and 30-year trends. Overall, global insured losses for the year came in at $95 billion, down from $125 billion in 2022.

Insured losses worldwide due to natural disasters fell slightly below the five-year average of $105 billion in 2023.

The report indicated that earthquakes in Türkiye and Syria were the most destructive events last year, causing $50 billion in overall losses and $5.5 billion in losses covered by insurance. The quakes killed over 55,000 people, with a further 100,000 injured, according to the British Red Cross. Munich Re also pointed to a growing number of severe regional storms in the US and Europe as a result of climate change.


The strongest tremor, measuring 7.8 magnitude, was the most powerful quake in Turkey in decades, causing 58,000 deaths, numerous building collapses and extensive damage to infrastructure.

“After years of relative calm, a series of devastating earthquakes led to humanitarian disasters. Around 63,000 people (85% of the year’s total fatalities) lost their lives as a result of such geophysical hazards in 2023 – more than at any time since 2010,” Munich Re stated. It noted that 2023 marks another year of “extremely high” damages even without any so-called mega-disasters in industrialized countries.

“The background noise has become louder. Loss events that were previously regarded as secondary and acknowledged as less significant ‘side risks’ have become a major loss driver,” Ernst Rauch, chief climate scientist at Munich Re, told Reuters.

The new study by Munich Re found that insured losses also totaled $95 billion as natural disasters led to a staggering 74,000 deaths in 2023, which was well above the five-year annual average of 10,000 fatalities attributed to both extreme weather and earthquakes.

The report largely blames climate change for powerful weather events that delivered havoc to nearly every corner of the world in 2023.

“The warming of the Earth that has been accelerating for some years is intensifying the extreme weather in many regions, leading to increasing loss potentials,” said Ernst Rauch. “More water evaporates at higher temperatures, and additional moisture in the atmosphere provides further energy for severe storms.”

Rauch warned: “Society and industry need to adapt to the changing risks — otherwise loss burdens will inevitably increase.”

Most of the economic losses in 2023 were due to severe storms, which accounted for 76% of total losses, while the remaining 24% of losses were caused by earthquakes.

High temperatures, including the hottest three-month period in history last summer, increased the frequency of weather disasters worldwide, the report stated.

By November, global temperatures were about 1.3 degrees Celsius higher than they were more than a century ago in pre-industrial times, the report states.

Heat records toppled across the globe throughout the year as temperatures soared across Europe in April and Argentina in September and in northwest China.

Night-time temperatures reached more than 89 degrees in Arizona in July.

A silver lining in the report revealed there were no mega-disasters in industrialized nations in 2023, unlike previous years, such as in 2022 when Hurricane Ian drove overall global losses up by $100 billion and insured losses up by $60 billion.

U.S. And Europe

The report pointed to a large number of severe regional storms that caused major impacts in the U.S., with $66 billion in assets destroyed and $50 billion insured; and across Europe, where $10 billion in assets were lost and $8 billion insured.

On average, the U.S. was experiencing about eight disasters per year, and an average of about 18 disasters every five years, according to a previous report from the National Oceanic and Atmospheric Administration.

Severe weather, including thunderstorms and hailstorms, were becoming more frequent across North America due to the growing intensity of the climate crisis, the report said, citing recent research.

An El Nino climate pattern in the North Pacific sustained extreme weather across the world last year, yet scientists maintain that climate change is still the biggest driver of global warming.

Heatwaves

Heatwaves and drought led to major wildfires around the world. In Canada, fires burned for several weeks, destroying 18.5 million hectares of forestland worldwide.

The report also mentions Typhoon Doksuri in July in the Philippines and Hurricane Otis on the west coast of Mexico in October as two of the more costliest disasters of 2023 in terms of overall losses.

Climate-related Disaster Costs Are Mounting

A CBS report (https://www.cbsnews.com/minnesota/news/2023-was-the-planets-hottest-year-on-record-and-climate-related-disaster-costs-are-mounting/) said:

“(It) was a record-breaking year, the warmest on record (for the planet). And 2023 did not break this record by a little. It broke it by a lot,” said NOAA Climate Scientist Tom Di Liberto.

For the U.S., last year was the fifth-warmest on record, and the eighth- and fourth-warmest for Minnesota and Wisconsin, respectively.

The year 2012 still holds the top spot for the warmest year in the United States, but Di Liberto said the warming trend is expected to continue.

“That is not to say every year will be the next warmest year on record, but the trend is clear,” he said.

The country also experienced the most billion-dollar disasters in a year: 28. That beats the old record of 22 from 2020. 

$603 Billion

Since 2019, the total cost of weather and climate disasters is over $603 billion.

“All of these events happening are not only going to stress a state and the community, but also the country being able to deal with all of those impacts. Sometimes these impacts can happen at the same time in different parts of the country. Or they can be one after another,” Di Liberto said.  “It can be incredibly taxing.”

And that’s why NOAA and NASA say they’re doing all the research, to better understand the risks of climate change and to help the country and world become even more climate resilient.

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