Thomas Blunck,Member of the Board of Management.
The first half of the year has provided a welcome breather from previous years of high natural disaster losses. But climate change and growing exposure persist, increasing the risk of larger losses in the future. The best way for society to reduce losses is to stop building in high-risk areas and to keep investing in prevention, said Thomas Blunck,Member of the Board of Management
Munich: In the first six months of the year, natural disasters caused worldwide losses estimated at nearly US$ 112bn, according to Munich Re’s report on H1 2026 natural disasters.
Of those losses, only US$ 44bn were insured, representing an insurance gap of 60%. Losses were slightly below the inflation-adjusted average figures for the first half of the year over the past ten years (overall losses: US$ 113bn; insured losses: US$ 50bn), but significantly below the 5-year average figures (overall losses: US$ 136bn; insured losses: US$ 66bn).
The first half of the year has provided a welcome breather from previous years of high natural disaster losses. But climate change and growing exposure persist, increasing the risk of larger losses in the future. The best way for society to reduce losses is to stop building in high-risk areas and to keep investing in prevention, said Thomas Blunck,Member of the Board of Management.
The most destructive natural disaster was a double earthquake in Venezuela on 24 June. In a matter of minutes, two powerful earthquakes with magnitudes 7.2 and 7.5 struck about 200 km west of the capital, Caracas, near the town of Morón.
According to the US Geological Survey (USGS), it was the most powerful quake to hit this highly earthquake-prone region since 1900. Thousands of people lost their lives. According to preliminary estimates, total losses are expected to be in the region of US$ 30bn, including insured losses of less than US$ 1bn.
For insurers, severe thunderstorms in the US were the biggest driver of losses in the first half of the year.
However, with total losses of around US$ 30bn and insured losses of US$ 22bn, the damage caused by the thunderstorms in the US was below the average figures for the past ten years (total losses: US$ 34bn; insured losses: US$ 26bn). Yet the tornado and hail events being well within expected ranges would have actually indicated higher losses.
Exacerbated by climate change: heatwaves in Europe and North America
Record-breaking heatwaves dominated the first half of the year in North America and Europe. Scientists now speak of “record-shattering temperatures”, as in many places, the new highs have far exceeded previous records. This particularly affected large parts of Central and Western Europe in June. In the town of Möckern in eastern Germany, for example, a temperature of 41.8°C was recorded – 0.6°C above the country’s previous high, set in 2019. It should also be kept in mind that June usually isn’t the hottest month of the year. Monthly temperature records had already been broken in Europe during an initial heatwave in May.
Studies show a clear link between heatwaves and climate change. With regard to Europe, a study found that the most recent heatwave would have been around 3.5°C cooler if it had happened 50 years ago. Europe is the fastest-warming continent and is warming at more than twice the global average rate.
According to another study, during a heatwave in the US in June, the combination of temperature and humidity reached levels that would have been virtually impossible without climate change. Sweltering heat is considered particularly stressful and dangerous for humans and animals alike. In many places across the eastern US states, the temperature barely dropped below 27°C (around 80°F), even at night.
Heatwaves are now regarded as the natural hazard that claims the most lives. In Germany alone, heat-related deaths between April and June are estimated to have exceeded 5,000, according to the Robert Koch Institute. It is difficult to quantify the financial impact of heatwaves, as they do not usually result in any direct damage to property. Instead, the damage is chiefly caused by falling productivity and production standstills, but also by damage to infrastructure, transportation breakdowns, and crop failures.
An OECD study based on company data from 23 developed economies concluded that labour productivity falls significantly during heatwaves and on extremely hot days. With ten additional days of temperatures above 35°C, annual labour productivity falls by an average of 0.3%. This is roughly equivalent to the effect of a 5% rise in energy prices. And heat stress even increases when humidity is higher.
Super El Niño is expected to change weather extremes worldwide
The second half of 2026 is also expected to be shaped by the climate phenomenon El Niño, which tends to produce even higher temperatures and influences extreme weather events in many regions of the world.
El Niño is part of a natural climate cycle known as ENSO (the El Niño-Southern Oscillation). This cycle involves periodic changes in temperatures and atmospheric conditions in the Pacific, which can affect weather patterns around the globe.
In many regions – such as Australia, Central America and southwestern Africa – El Niño is increasing the risk of drought and wildfires. In western South America, parts of Brazil, and the southwestern US, on the other hand, it can lead to an increase in heavy rainfall accompanied by flash floods. El Niño dampens the hurricane season in the North Atlantic, but enhances tropical cyclone activity in all parts of the North Pacific, including the Northwest Pacific.
El Niño tends to cause higher global mean temperatures – on top of the higher temperatures already caused by climate change. Global mean sea surface temperatures are already at record levels. In terms of global mean temperature, 2024 currently holds the record, at around 1.5°C over pre-industrial levels – and was influenced by El Niño. Much as is the case now, back then El Niño began in the course of 2023 and continued to have a significant impact well into the following year.
Current forecasts point to record-breaking El Niño conditions towards the end of the year. El Niño phases usually last between six months and a year, often peaking around the end of the calendar year.
Tobias Grimm, Munich Re’s Chief Climate Scientist, warns: “It’s a dangerous mix: as global warming continues, the world is also heading for a Super El Niño, which will drive temperatures up even further. The effects will likely be clearly felt in the second half of the year. Taking timely precautions saves lives and limits the economic damage caused by disasters.”
In the Asia-Pacific region, losses remained significantly lower than in previous years. Total losses amounted to around US$ 8.7bn (10-year average, adjusted for inflation: US$ 32bn), of which just over US$ 1bn (US$ 5bn) were insured.
Throughout May, persistent rainfall in central and southern China led to severe flooding. A rain band hundreds of kilometres wide brought heavy precipitation to numerous provinces, with some areas receiving up to 400 mm of rain per square metre. According to media reports, more than 100 rivers burst their banks. City centres were flooded and vehicles were swept away. An estimated 45 people lost their lives. Heavy rainfall is common in China during the East Asian summer monsoon, but this year it began earlier than usual. Initial estimates put the nationwide losses from the May floods at approximately US$ 2.8bn, only a fraction of which were insured.
Severe bushfires broke out in southeast Australia, producing total losses of almost US$ 1bn, two-thirds of which were insured. Australia is also heavily impacted by heatwaves, the direct losses from which are difficult to quantify. In its latest “Australia’s National Climate Risk Assessment”, the Australian Climate Service, citing a study published as far back as 2018, estimated that heatwaves are already reducing labour productivity by up to around 0.5%, which translates to billions in losses for its economy.
In India, the monsoon rains that are vital for much of the country’s agriculture arrived later than usual and remained significantly weaker than normal. At the same time, strengthening El Niño conditions heightened the risk of drought-related impacts.
And the second half of the year holds significant risks for the region. In Australia and parts of Southeast Asia, El Niño often increases the risk of heatwaves, droughts and wildfires. At the same time, El Niño can enhance rainfall and flood risk in other parts of Asia, particularly where altered monsoon patterns or typhoon activity lead to excessive precipitation.
Moreover, El Niño tends to shift the areas where typhoons in the Northwest Pacific form toward the east. With more time over warm ocean waters, typhoons can intensify and persist longer, increasing the likelihood of severe storms. Their tracks also tend to shift northward, placing Japan, Korea and Greater China at greater risk.
In Africa, natural disasters caused losses amounting to around US$ 2bn. Only a fraction of these losses were insured. The largest damage was caused by storms and flooding in South Africa in May, with overall losses amounting to more than US$ 0.5bn. The loss numbers once again highlighted the continent’s protection gap: while exposure is rising, insurance coverage remains limited, leaving governments, businesses and households to absorb most of the financial impact on their own, which also slows recovery efforts.