Nat Cat & Inflation - A perfect storm

Natural catastrophes – converging with a global surge in inflation last year – formed a perfect storm that will continue to have an impact in the current and future years.  
Last year, the re/insurance industry covered around 45% of the USD 275 billion global economic losses resulting from natural catastrophes, reaffirming the long-term growth trend of 5-7% in annual insured losses. 

According to the sigma 1/2023, socio-economic factors remain the main driver of rising losses. High inflation rates and supply chain disruptions exacerbate the value of insured losses. Rising natural catastrophe losses and shortfalls in industry estimates point to the need for a better understanding of all the risk drivers at play, especially for lower-severity, but higher-frequency perils such as floods or severe convective storms.