Natural Disaster Losses Ease as Climate Risks Intensify

Global natural disaster losses totaled an estimated $112 billion during the first half of 2026, slightly below the inflation-adjusted 10-year average of $113 billion, according to Munich Re. Insured losses reached $44 billion, leaving an insurance gap of about 60 percent.

While overall losses moderated compared with recent years, Munich Re warned that climate change and rising exposure continue to increase the potential for larger losses.

"The first half of the year has provided a welcome breather from previous years of high natural disaster losses. But climate change and growing exposure persist, increasing the risk of larger losses in the future. The best way for society to reduce losses is to stop building in high-risk areas and to keep investing in prevention," Thomas Blunck, member of the board of management at Munich Re, said.

The deadliest event was a double earthquake that struck western Venezuela on June 24. The magnitude 7.2 and 7.5 earthquakes, centered near Morón, killed thousands of people and produced preliminary economic losses of about $30 billion. Insured losses are expected to remain below $1 billion, reflecting the country's limited insurance penetration.

For insurers, severe thunderstorms in the United States generated the largest insured losses during the first half of the year. Thunderstorm events caused approximately $30 billion in overall losses and $22 billion in insured losses, both below the 10-year averages of $34 billion and $26 billion, respectively.

Record-breaking heatwaves across North America and Europe underscored the growing influence of climate change. Scientists reported temperatures that exceeded previous records by unusually large margins. In Germany, temperatures reached 41.8°C in Möckern, surpassing the country's previous record by 0.6°C. Studies cited by Munich Re found Europe's recent heatwave would have been about 3.5°C cooler had it occurred 50 years ago, while another study concluded that June heat conditions in parts of the United States would have been virtually impossible without climate change.

Heatwaves continue to pose significant economic risks despite causing little direct property damage. Munich Re cited Organisation for Economic Co-operation and Development research showing that 10 additional days above 35°C reduce annual labor productivity by an average of 0.3 percent, an effect comparable to a 5 percent increase in energy prices. Germany alone is estimated to have recorded more than 5,000 heat-related deaths between April and June, according to the Robert Koch Institute.

Munich Re also warned that strengthening El Niño conditions could intensify weather extremes during the second half of the year. The climate pattern is expected to raise temperatures further while increasing drought and wildfire risks in regions including Australia, Central America, and southwestern Africa. Heavy rainfall and flash flooding could become more likely in western South America, parts of Brazil, and the southwestern United States, while tropical cyclone activity is expected to increase across the North Pacific.

"It's a dangerous mix: as global warming continues, the world is also heading for a Super El Niño, which will drive temperatures up even further. The effects will likely be clearly felt in the second half of the year. Taking timely precautions saves lives and limits the economic damage caused by disasters," Tobias Grimm, Munich Re's chief climate scientist, said.

North America recorded approximately $47 billion in overall losses through June, including $34 billion in insured losses. A severe April thunderstorm outbreak across the central United States generated $5.8 billion in losses, while three winter storms between January and March produced nearly $11 billion in damage. Although Atlantic hurricane activity remained limited through June, Munich Re cautioned that destructive hurricanes can still occur during El Niño years.

In Europe, nine winter storms affecting Portugal and Spain drove most of the region's losses. Storm Kristin alone caused approximately $7.7 billion in damage, including $1.8 billion in insured losses. Total natural disaster losses across Europe reached about $22 billion, exceeding the 10-year average.

The Asia-Pacific region experienced comparatively lower losses, totaling $8.7 billion, well below the 10-year average of $32 billion. Flooding in China caused an estimated $2.8 billion in losses, while bushfires in southeast Australia generated nearly $1 billion in damage. Munich Re also highlighted increasing drought risks in India and warned that El Niño could heighten the threat of heatwaves, wildfires, flooding, and stronger typhoons across the region during the remainder of the year.

Natural disaster losses in Africa totaled approximately $2 billion, with only a small share insured. Storms and flooding in South Africa accounted for more than $500 million in losses. Munich Re said the region's limited insurance coverage continues to leave governments, businesses, and households responsible for absorbing most disaster-related financial losses.