In 2021, there were 20 billion-dollar weather and climate disaster events across the United States, according to the annual report by the National Oceanic and Atmospheric Administration (NOAA). It is the seventh consecutive year (2015-2021) in which ten or more billion-dollar weather and climate disaster events have impacted the United States and ranks second only to 2020 with 22.
In an alarming trend for property and casualty insurers, the average number of billion-dollar disasters has been increasing over the past several years. The 1980s had an average of 2.9 billion-dollar disasters per year. That average more than doubled by the 2000s, to 6.3 per year. In the last five years, an average of 17.2 billion-dollar disasters have occurred each year.
2021 was also the third costliest year on record, with total damages at $145 billion. Hurricane Ida, which made landfall in Louisiana in August with 150 mph winds, was the most expensive event of the year at $75 billion. The second most expensive event was the mid-February winter storm that devastated Texas, causing several days of massive power outages.
NOAA stated: “In recent years there has been an increasing exposure and vulnerability of the U.S. to extreme weather and climate events. The disaster costs for 2021 ($145.0 billion) well surpassed the disaster costs for 2020 ($102.0 billion, inflation-adjusted to 2021 dollars). The total costs for the last five years ($742.1 billion) is more than one-third of the disaster cost total of the last 42-years (1980-2021) at $2.155 trillion (inflation-adjusted to 2021 dollars).”
The increasing frequency and severity of billion-dollar weather events are disrupting the future of the insurance industry. Sustained profitability will require new insights and innovative tools to address the future risks of a changing climate. Opterrix is the most powerful weather and climate-related risk intelligence platform for the property insurance industry. Our suite of real-time severe weather detection, claims predictions, and automated notifications enable risk and claims executives to proactively prepare for a changing climate. Schedule a free demo at https://opterrix.om/contact/.