Natural disasters cost property insurers $65 billion in 2023, according to new estimates that shed light on how extreme weather threatens U.S. insurance markets.
Analysts at AM Best dug into the finances of property and casualty insurers for two reports published last month. They found that while the sector suffered fewer overall underwriting losses last year than they did in 2022, extreme weather accounted for a larger share of those losses.
“Insured losses from weather-related events continue to take a toll on [property and casualty] insurers and to trend above the long-term averages, as the frequency and intensity levels of storms worsen,” AM Best analysts wrote. “What has been particularly troublesome for insurers in the past three years is the degree to which losses from so-called secondary perils are growing.”
The U.S. experienced more billion-dollar natural disasters — also known as secondary perils — in 2023 than any other year on record. Among them: the deadly wildfire in Lahaina, Hawaii; drought in the South and Midwest; heavy flooding in northern California; and a winter freeze in the Northeast.
