Billion-dollar disasters: The economic toll of wildfires, severe storms and earthquakes is soaring

Yahoo

7 days ago

Weather disasters in the first half of this year have cost the United States $93 billion in damage, according to a report released Tuesday by a German multinational insurance company.
The analysis by Munich Re, the world's largest reinsurer, found that more than 70% of all damage globally from weather disasters so far this year occurred in the U.S., with uninsured Americans and their local governments experiencing a whopping $22 billion in damage.
The report shows the soaring economic toll that wildfires, severe storms and other extreme events are exacting in the U.S. and globally. The findings also highlight the growing insurance crisis playing out in parts of the country that are prone to frequent weather disasters.
'We have seen some 90% of all losses for the insurance industry — so 72 out of 80 billion U.S. dollars — have happened in the U.S.,' said Tobias Grimm, Munich Re's chief climate scientist. 'That's extraordinary.'
The devastating wildfires in Southern California in January topped the list of the country's costliest disasters in the first half of 2025. The two largest fires, which killed at least 30 people and displaced thousands more, ripped through the communities in Pacific Palisades and Altadena, fanned by strong Santa Ana winds.
Munich Re estimated that the wildfires caused $53 billion in losses, including about $13 billion in damages for residents without insurance. The reinsurer said the Los Angeles-area blazes resulted in the 'highest wildfire losses of all time.'
The wildfires' huge economic and societal toll was due in part to increased development in fire-prone areas.
'Losses are on the rise because often properties are in harm's way,' Grimm said. 'People still live in high-risk areas.'
Urban development in hazard-prone areas can similarly drive up the cost of other weather-related disasters, such as hurricanes and flooding, which are becoming more frequent and severe due to climate change.
Studies have shown that climate change is making wildfires more frequent because of warmer temperatures and worsening drought conditions. Blazes are also becoming more intense, as a result.
A report released in late January from the World Weather Attribution group found that the hot, dry and windy conditions that helped the fires consume large swaths of Southern California were about 35% more likely because of human-caused global warming.
Munich Re's own earnings have been affected by the L.A. wildfires, as was reported by CNBC. Profits were down a total of $1.9 billion for Munich Re and Hannover Re (another German reinsurer), according to their first-quarter earnings reports.
Other major disasters in the U.S. so far included severe storms in March that caused $6.7 billion in damage, a series of tornadoes in May that caused about $5 billion in losses, and severe storms and flooding in April that caused $4 billion in damage.
Overall, 'severe convective storms' — ones that produce excessive rainfall, strong winds, tornadoes or large hail — caused $34 billion in damage in the U.S. from January through June, according to Munich Re. Of that, $8 billion were uninsured losses, the company found, which included damage to roads and public schools.
Outside of the U.S., a tropical cyclone that hit Australia in late February dumped heavy rain over parts of Queensland and New South Wales, causing an estimated $3.5 billion in damage.
Internationally, the costliest disaster so far this year wasn't climate-related: A 7.7-magnitude earthquake struck Myanmar in late March. An estimated 4,500 people died after the quake rattled the cities of Sagaing and Mandalay and surrounding areas.
And a magnitude-6 earthquake that struck Taiwan in January caused $1.3 billion in losses, according to Munich Re.
The insurance company's report comes months after the National Oceanic and Atmospheric Administration said it would stop tracking the economic toll of the United States' costliest extreme weather events. The elimination of NOAA's 'Billion Dollar Weather and Climate Disasters' yearly reports was seen by critics as yet another way that the Trump administration has cut back or eliminated climate science at federal agencies.
A NOAA spokesperson previously told NBC News that the decision to discontinue the database was made 'in alignment with evolving priorities and staffing changes.'
Grimm said it's 'vital' to collaborate with NOAA and other government agencies to ensure that these types of reports contain accurate data. The resulting analyses can, for instance, be used by insurance companies and government officials to shape policies, and they are particularly important as billion-dollar disasters become more frequent.
'The probability of extreme weather is changing,' Grimm said, 'so we need to adapt and, of course, to mitigate future losses.'
This article was originally published on NBCNews.com