Natural disasters are costing insurance companies more than ever.
Continue Reading Below
Forest fires led the way in 2018, with the deadly fire that ravaged northern California the single-most expensive natural disaster of the year, according to a report from Munich Re.
MORE FROM FOXBUSINESS.COM
The California wildfire that devastated the small town of Paradise in November caused losses of $16.5 billion, of which $12.5 billion were insured.
Worldwide natural disasters caused $160 billion in economic damage in 2018. That was down from $350 billion the previous year, but a number of devastating hurricanes had contributed to the high losses in 2017.
Insurers spent $18 billion on two huge fires in the United States in 2018 – equivalent to one in every four dollars they paid out as a result of natural disasters, according to Reuters.
Advertisement
Ernst Rauch, Munich Re’s chief climatologist, told Reuters that forest fires were entering a whole new dimension, costing tens of billions of dollars.
CLICK HERE TO GET THE FOX BUSINESS APP
Reinsurers act as a financial backstop to insurance companies, paying a chunk of the big claims for storms or earthquakes in exchange for part of the policy premiums.
Munich Re board member Torsten Jeworrek said that 2018 was marked by several severe natural disasters with high insured losses.
He added that climate change appears to be making such large fires more common.
