According to a report by Munich Re, natural disasters caused damage worth $250 billion worldwide in 2023 and claimed 74,000 lives . The report also states that insured losses amounted to $95 billion .
Natural disasters occur due to natural processes on Earth, such as floods, hurricanes, earthquakes, and tsunamis. The economic losses from natural disasters are not only physical but also include the costs required to rebuild an affected area after a natural disaster occurs. Lower-income countries are more likely to be affected by natural disasters due to a lack of developed infrastructure, inadequate housing, and lack of backup resources .
In 2022, the economic loss due to natural disaster events worldwide amounted to about $313 billion . From 2017 onwards, average annual insured losses from natural catastrophes have been over $110 billion, more than double the average of $52 billion over the previous five-year period . Factors contributing to these higher losses are asset value accumulation in areas prone to an extreme weather event and elevated construction costs .
It is important to note that the economic losses caused by natural disasters are not only limited to the year in which the disaster occurred. The long-term effects of natural disasters can be felt for years after the event. For example, Hurricane Katrina, which hit the United States in 2005, caused economic losses of $125 billion . However, the long-term effects of the hurricane are still being felt today, with some estimates suggesting that the total economic losses could be as high