The climate crisis is exacting a rising price from the worldwide insurance industry, a relief and development agency says. The economic cost of the climate crisis keeps on rising, as the world’s insurance industry is now acutely aware. As the world digests the news that 2020 was the joint hottest year on record, two reports attempt to assess how many billions of dollars are being lost as a result of an ever-warming planet. Christian Aid, the UK and Ireland-based charity, lists what it considers to be the 15 most serious climate-related disasters in 2020, and seeks to quantify them in financial terms.
Six of the ten most costly disasters happened in Asia, many of them associated with an unusually prolonged and wet monsoon season. The charity estimates that floods in China cost US$32 billion, while extended rains in India cost US$10bn. Cyclone Amphan, which in May hit the Bay of Bengal region – one of the world’s most densely populated areas – caused losses valued at US$13bn. While Covid-19 has an expiry date, climate change does not, and failure to ‘green’ the global economic recovery now will increase costs for society in future.
In Africa, unusually heavy rains and changing wind patterns are considered to have been the main factors behind devastating infestations of locusts, which caused an estimated US$8.5bn of damage to crops in Kenya and other East African countries. In its latest update on locust breeding and movement patterns, the UN’s Food and Agriculture Organisation warns that swarms are likely to continue devastating crops across the Arabian peninsula and in East Africa in the weeks ahead.
Insurance is a very unequal business: much of the property and economic infrastructure of the developing world is not insured, with the bulk of cover being in the US, Europe and other leading economies. Swiss Re is one of the world’s biggest insurance groups. Its preliminary estimate of global insurance losses as a result of both what it terms natural catastrophes and man-made disasters in 2020 amounts to US$83bn, up 40 per cent on the previous year. A large chunk of those losses resulted from claims related to extreme weather events in the US.
Source: Eco-Business
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