Economic losses are expected to rise as a result of climate change, with the United States and the Philippines being the most severely affected, according to a study by the Swiss Re Institute.
Swiss Re Institute’s new report “Changing climates: the heat is (still) on” analyzes where hazards are likely to intensify and overlays it with its own estimates of economic losses resulting from the four major weather perils.
- Four weather perils – floods, tropical cyclones, winter storms in Europe and severe thunderstorms – today cause global estimated economic losses of USD 200 billion every year
- As of today, the US economy loses almost 0.4% of GDP (USD 97 billion) whereas the Philippines lose 3% of GDP (USD 12 billion) caused by the four weather perils, while at the same time being exposed to hazard intensification in the future
- Swiss Re Institute ranks 36 countries most at risk of higher property damage losses from intensifying weather hazards driven by climate change
The Philippines currently experiences annual economic losses of 3% of GDP, making it the most impacted by the four weather perils out of 36 countries. It also faces a high probability of hazard intensification. The US follows as the second-most exposed, with economic losses amounting to USD 97 billion (0.38% of GDP) from weather events, and a medium probability of hazard intensification.
The report indicates that countries with significant insurance protection gaps and slower establishment of loss mitigation and adaptation measures relative to economic growth are at higher financial risk from hazard intensification. According to the report, fast-growing Asian economies such as Thailand, China, India, and the Philippines are the most vulnerable.
Floods are projected to intensify, with tropical cyclones being the main cause of damage
While flood risk is projected to intensify globally, the main driver of major weather-related economic losses in the US, as well as in east and southeast Asia, are tropical cyclones. Today, in absolute terms, economic losses from weather events in the US are the highest in the world, mostly driven by tropical cyclones (hurricanes). Severe thunderstorms also account for a large share of the economic losses.
Table: Top ten countries most exposed to four weather perils as of today
| Rank | Country | Annual economic loss (% of GDP) |
| 1 | Philippines | 3.00% |
| 2 | US | 0.38% |
| 3 | Thailand | 0.36% |
| 4 | Austria | 0.25% |
| 5 | China | 0.22% |
| 6 | Taiwan | 0.21% |
| 7 | India | 0.20% |
| 8 | Australia | 0.19% |
| 9 | Switzerland | 0.19% |
| 10 | Japan | 0.18% |
As-of-today probabilistic economic losses as a percentage of GDP from the four major weather-peril events, by country, in 2022.
Note: These are just the lower bound of potential economic losses, as the study does not cover all weather perils (eg heatwaves) and account for property losses only. And, as changing climates fuel weather-event intensity, loss potential will likely rise. Source: Swiss Re Institute, 2024
