Insured losses from severe thunderstorms have reached a record $US60 billion ($91 billion) this year, Swiss Re Institute estimates. 

Losses from severe thunderstorms have increased by 7% annually in the past 30 years, but this year marks an increase of almost 90% compared to the previous five-year average of $US32 billion ($48.7 billion), and will more than double the 10-year average of $US27 billion ($41 billion). 

“The cumulative effect of frequent, low-loss events, along with increasing property values and repair costs, has a big impact on an insurer's profitability over a longer period,” Swiss Re Group Chief Economist Jerome Jean Haegeli said. 

“The high frequency of severe thunderstorms in 2023 has been an earnings test for the primary insurance industry.”  

Swiss Re says the US is prone to severe convective storms due to its geographical location and this year has experienced 18 events to date that each caused insured losses of at least $US1 billion ($1.5 billion). 

Europe has also seen an increase in severe thunderstorm impacts. Italy was the most affected this year, with losses of more than $US3.3 billion ($5 billion). 

Head Catastrophe Perils Balz Grollimund says the events provide the insurance industry with benchmarks for estimating the increasing loss trends. 

“Nevertheless, to further progress the deeper understanding of this peril, it is important to get better insights from primary insurers on distributions of insured exposure and detailed claims data,” he said. 

“It is equally important that insurance premiums adequately reflect the risk for the coverage provided especially also in light of increasing loss trends.”  

Swiss Re says urban development, wealth accumulation in disaster-prone areas and inflation are key factors at play, turning extreme weather into ever-rising natural catastrophe losses. 

Rising temperatures are further increasing the risk of severe droughts and wildfires and Swiss Re says with this year expected to be the warmest on record, the effects of climate change are becoming apparent. 

Total natural catastrophe losses this year are expected to reach $US100 billion ($152 billion), down from $US133 billion ($202 billion) last year, while man-made losses are estimated at $US8 billion ($12.2 billion). 

North Atlantic hurricane season losses have been below average, but Hurricane Otis will likely be the most expensive insured event in Mexico, according to Swiss Re Institute. 

New Zealand floods and cyclones caused the country’s costliest weather-related insured losses, at $US2.4 billion ($3.6 billion) and the Maui wildfires in Hawaii triggered losses of $US3.5 billion ($5.3 billion).  

Overall, the Turkey and Syria earthquake was the costliest natural catastrophe this year, with losses of $US6 billion ($9.1 billion). Morocco also experienced the strongest earthquake to hit the country since 1990.