Disaster claims reached $120 billion in 2021: Munich Re

(Bloomberg) -- Germany suffered its costliest natural disaster on record last year, as flash floods led to damages that vastly exceeded the amount covered by insurers.

Torrential rainfall that devastated parts of western Germany in July 2021 cost Europe’s biggest economy $40 billion, according to a Munich Re report published on Monday. Roughly a quarter of that will be met by the insurance industry, it said.

In a year that saw global damages from natural disasters soar to $280 billion, the fallout from climate change is forcing governments, businesses and investors to brace for more of the same. Ernst Rauch, chief climate scientist at Munich Re, says there’s a “plausible” link between climate change and “increasing storm damage.” He also says some extreme weather events are likely to become more frequent -- or more severe -- as a result of global warming.

Globally, insurance claims stemming from natural disasters reached $120 billion in 2021, substantially more than in the previous two years, according to the Munich Re report. With overall losses of about $65 billion, Hurricane Ida was the world’s costliest weather-related disaster last year.

In Germany, the July rainfall caused by low-pressure system Bernd was the highest in over 100 years. It triggered flash floods that swept away buildings and severely damaged critical infrastructure such as railway lines, roads and bridges. More than 220 people were killed, leaving the continent in shock.