Global reinsurance major Munich Re has estimated insurance losses of $120 billion in 2022 from global catastrophes as climate change has emerged as a major underwriting concern for the insurance sector globally, including India.

Munich Re in a statement on Tuesday said provisional estimates for overall losses in 2022 was at $270 billion with Hurricane Ian being estimated as the costliest natural disaster in 2022 with estimated losses of $100 billion of which around $60 billion was insured. Devastating floods in parts of Asia and Australia, exacerbated by La Niña and climate change were also factors leading to insured losses.

Munich Re said the overall losses were close to the average for the last five years, while insured losses were significantly above average (2017–2021: $97 billion).

“The high level of insured losses is impacting insurers at a time they are having to deal with both high inflation rates and a shrinking capital base due to rising interest rates. In contrast, the positive effect on investments from higher interest rates will only come in time,” Munich Re said.

“Climate change is taking an increasing toll. The natural disaster figures for 2022 are dominated by events that are more intense or are occurring more frequently... Prevention and financial protection, in the form of insurance, must be given higher priority,” said ThomasBlunck, member of the board of management, Munich Re.

“In 2022, we were experiencing La Niña conditions for the third year in a row... climate change is tending to increase weather extremes ...the effects sometimes complement each other,” said Ernst Rauch, chief climate scientist at Munich Re.

India situation

India has seen losses estimated at over Rs 4.12 lakh crore between 2014 and 2021 through floods and cyclone. Amphan brought losses in the range of Rs 1 lakh crore, data compiled by ICICI Lombard shows. The insured losses were estimated at Rs 21,645 crore.