A new assessment from the global reinsurer Munich Re, draws on the expertise of Chief Climate Scientist Tobias Grimm and Lisa Hanselmann, Head of NatCatSERVICE, and sets out how major economies are increasingly strained by weather-related catastrophes.
The company’s analysis shows that eight of the ten largest industrialised nations now face significantly higher losses from weather events as a proportion of gross national income compared with the 1980s.
According to Munich Re, recent years have been especially costly for the United States, Germany and India, where extreme events have steadily weakened economic resilience.
Released ahead of the COP 30 climate summit in Brazil, the Munich Re study illustrates how even the strongest economies are exposed to rising financial pressure from worsening heat, flooding, storms and wildfires. Munich Re finds a marked increase in loss ratios in the United States, Germany, Canada, Italy and France, with India, Japan and Brazil also experiencing upward movement, although to a lesser extent.
Grimm, speaking for Munich Re, underlines the global nature of this challenge. “Rich countries, poor countries – it makes no difference to climate change. Weather disasters destroy lives, livelihoods and economic assets all over the world. It would make more sense to invest much more money in prevention than having to spend billions rebuilding after disasters – in richer and poorer countries alike.”
Munich Re reports that between 2020 and 2025 the US recorded average annual losses equal to 0.54 per cent of GNI, Germany reached 0.29 per cent and India 0.28 per cent. In monetary terms this represents approximately 150 billion US dollars a year in the United States, 14 billion US dollars in Germany and 9 billion US dollars in India, adjusted for inflation. The sharpest long-term escalation is observed in the United States, where losses relative to economic output have increased fivefold since the 1980s. Germany has followed a similar path, influenced heavily by the Ahr Valley floods of 2021.
Although these national loss ratios may appear modest, Munich Re highlights that the strain in affected regions is far greater. Local communities often face a disproportionate share of the financial and social burden, and the pressure on public budgets can intensify sharply. Studies referenced by Munich Re show that money spent on protective measures can avoid far higher costs in the long run.
Grimm notes that recent years have included exceptional individual events such as the 2021 flooding in Germany and severe flooding in Brazil in 2024. He commented: “For some countries, the damage data has been particularly influenced by individual events in recent years, such as the flooding in Germany’s Ahr Valley in 2021 or the worst flooding seen in Brazil in decades, in 2024. What many of these outlier events have in common is that studies have identified a clear influence of climate change: they are becoming more frequent and more intense.”
The study uses Munich Re NatCatSERVICE data going back to 1980, with losses compared against GNI from each corresponding year. Munich Re explains that this approach offers a clearer view of the relative burden faced by each country and helps offset the effects of rising asset values over time.
Munich Re also points to the value of preventative action. China provides a prominent example. Despite continued billion-dollar flood losses, long-term losses relative to GDP have fallen significantly since the 1990s due to substantial investment in flood-management systems. This stabilisation has continued even as exposure has grown alongside rapid economic development.
Country-level patterns add further detail to Munich Re’s findings. In Canada, losses relative to GNI in the past five years were more than four times higher than the 1980s average. Severe thunderstorms have generated the largest share of losses since 1980, followed by floods and wildfires. The insurance gap has narrowed over time, although a notable proportion of losses remains uninsured.
In the US, tropical cyclones remain the dominant source of financial damage, responsible for just over half of total inflation-adjusted losses since 1980. Severe thunderstorms represent the second-largest contributor and have become increasingly significant, accounting for around one third of losses in the most recent five-year period.
Munich Re highlights that while major hazards such as tropical cyclones or earthquakes can cause extremely high losses, the overall trend is shaped increasingly by less dramatic but more frequent events such as floods, storms involving hail and wildfires. Less than half of total losses remain uninsured in the United States, with high insurance penetration for thunderstorm and wildfire losses.
Munich Re’s specialists conclude that the rising financial toll on some of the world’s most advanced economies reinforces the importance of strengthening resilience and investing in preventative strategies. As losses continue to grow, preventative investment remains one of the most effective means of protecting future economic stability.
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