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274 Global Catastrophic Events Made 2020 the 5th-Costliest Year

Source: Swiss Re Institute

Last year became the fifth-costliest year on record for global natural catastrophes, reaching $81 billion in insured losses. Insured losses from secondary perils — frequent natural disasters with low-to-medium magnitude losses — are growing steadily, representing 71% of all losses and costing over $57 billion last year. 

There were over two hundred catastrophic events in 2020 — the U.S. was hit the hardest by economic losses, followed by Australia and Asia. The agricultural sector is most at risk for financial losses, as about 75% of production is not insured — alongside the construction, tourism and renewable energy sectors. If not addressed, these sectors face volatile revenue, higher costs, low earnings or bankruptcy. 

“With economic losses from catastrophes growing faster than insured losses,” states the World Economic Forum, “adapting economies to climate-related impacts has become a major societal priority.” Parametric insurance — the fastest-growing type of insurance — can help companies, in both developed and developing countries, manage this business risk with its rapid payout speed.

Rise in Fossil Fuel Emissions Slowing Worldwide

Source: The Economist

The growth in fossil fuel emissions is slowing down worldwide as countries make some progress in the fight against climate change. The rate of increase in global CO2 emissions has slowed from 3% per year in the 2000s to 0.5% per year in the last decade, reports the Global Carbon Project

Part of the decline is due to a change in the global economy, in which GDP growth is less energy intensive — and therefore produces less carbon emissions (e.g., economies that move from manufacturing to services). In the last decade, 24 countries have decreased their carbon emissions while growing their economies, including countries across Europe, the Americas and Asia. Less-developed countries are also producing less carbon emissions as they use fossil fuels more efficiently than countries in the past. For example, India and Vietnam are greener than China, even though they are primarily powered by coal

Another factor is an increased use of renewable energy and electric vehicles, according to the International Energy Agency. Solar and wind power were the leading sources of renewable energy and grew faster than any other energy source in 2022. But global coal use is also expected to increase, led by demand in Asia and countries looking for alternatives to high natural gas prices.

Global Housing Slump Likely Next Year

 

Housing markets around the world are headed for their biggest slump in over 20 years, as central banks raise interest rates and real wages fall, according to data from Oxford Economics. 

On the heels of the pandemic housing boom, housing sales and prices are falling in wealthy countries like the U.S., Germany, France, the U.K., Canada and New Zealand. In China, property stands empty as construction stalls on around 2 million homes. Inflation is the main factor behind the slowdown: higher mortgage rates, decreased affordability, and stricter lending standards have led analysts to project a moderate-to-steep drop in the housing market in 2023. 

In the U.S., mortgage rates reached 7% for the first time since 2002, pushing potential buyers out of the market. Mortgage rates have almost doubled in 25 cities around the world, including Amsterdam, Toronto and Zurich. Rent prices are also starting to cool after a pandemic surge — in the U.S., rents dropped slightly from September to October, ending a two-year growth streak. Housing prices in China fell at their fastest rate in seven years, and sales fell by 43%. In the U.K., housing sales dropped by 32% year-over-year in September, while U.S. sales of existing homes fell 28% in October.

Gen Z Trusts Local News Over Social Media

U.S. adults of all ages trust local news organizations more than information from national news outlets or social media, a recent Pew Research Center study reveals. The majority of Americans (71%) say they have a lot or some trust in local news, but that share is down from a high of 85% in 2019 and 2017.

In contrast, trust in social media has risen to its highest level among adults under 30. Half of 18- to 29-year-olds say they trust information from social media, just under the 56% who trust national news outlets. The percentage of young adults who trust national news is at its lowest level. About a quarter of adults under 30 regularly get their news from TikTok. The share of Americans of all ages who get their news from TikTok (10%) has tripled in the last two years.

U.S. adults over 30 are much less likely to trust information from social media, and Americans 50 or older are more likely to trust national and local news. But political parties are still the most influential factor in Americans’ perception of the media — Democrats (77%) are much more likely to trust national news outlets than Republicans (42%).

Consumers Keep Spending as Inflation Rises

Source: The Economist

Americans are heading into Black Friday sales ready to spend, even as their confidence in the economy drops. 

U.S. consumer spending seemed resilient to inflation in recent months, increasing by 0.6% in September and 6.2% since last year. Retail sales also rose more than expected, up by 1.3% in October, their strongest gain in eight months. That gain was driven, in part, by early holiday sales in October, from retailers like Amazon and Target.

But some retailers don’t expect that spending to last, as steep prices mean consumer dollars don’t go as far compared to previous years. Despite deeper discounts, inflation has pushed the cost of goods like toys and electronics higher than in 2021. Clothing is the only category that is cheaper this year.

About 60% of consumers said that they had already cut spending in response to inflation, while more said they would cut spending next year. That uncertainty was reflected in this month’s consumer sentiment index, which recorded a drop in consumer confidence of 9% —  the first decline since the index’s all-time low in June.

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