The global insurance industry must prepare for annual losses of $151 billion due to natural disasters. This is according to a new forecast by Verisk, a leading risk modeling company whose models are widely used by insurers and reinsurers. Particularly in loss-heavy years, the damages could be significantly higher, according to Verisk.

Rob Newbold, a president at Verisk, emphasized that the past four challenging years for the industry "should not be considered an outlier." He stated that the insurance industry must prepare to manage such high losses to avoid jeopardizing its solvency.

According to Verisk, the expected average annual loss due to natural disasters is at a new record high. This estimate also includes crop losses; without these, the forecast is 119 billion USD.

The causes for the increase in losses are diverse. Verisk particularly highlights the impacts of climate change, the growing risk due to increasing population density in vulnerable areas, and the rising costs of reconstruction. Although it is difficult to clearly identify the impact of climate change in global loss data, Verisk expects this factor to gain significant importance in the coming decades.

The climate change affects all atmospheric risks, including tropical cyclones," states the Verisk report. The impacts are particularly evident in wildfires, floods, and severe thunderstorms, although the scientific basis for the connection with severe thunderstorms is less established.

Verisk is currently collaborating with scientists to better understand the causes of the record year 2023 in terms of severe thunderstorms in the USA. The industry's focus is increasingly on so-called "secondary" risks such as storms and wildfires. While these do not possess the destructive power of a major hurricane or earthquake, their cumulative damage presents a growing challenge for the insurance industry.