The estimated cost of natural disasters in Spain in 2021 totaled 3.6 billion euros, reflecting direct impacts on assets, GDP, and critical infrastructure. This figure aligns with two-thirds of the annual barometer produced by the Aon foundation, with insured losses reaching 2.32 billion euros.
Disasters such as the Filomena storm, the La Palma volcanic eruption, frosts, DANAS, hail and rain events, windstorms, heatwaves, and floods collectively generated 1.3 billion euros in financial losses, with 41% covered by insurance. Spanish companies faced a sharp drop in revenue, totaling 3.292 billion euros, and 1.492 of these losses affected the agriculture and agri-food sector directly. In addition, the price tag for damage to critical infrastructures stood at 522 million euros.
63% increase in compensation for the La Palma eruption compared with the previous year
Compensation from these extraordinary events reached 2.32 billion euros, marking a 63 percent rise from 2020 and a 29 percent rise from 2019. Approximately half of these payments came from private insurance, with 35% covered by Agroseguro, 25% by the Insurance Compensation Consortium, and 1% by Civil Protection.
The principal driver of rising costs in 2021 was the La Palma volcanic eruption. An adviser to International Financial Analysts, Verónica López, who sits on the report’s scientific board, notes that the data reflect a scenario where roughly four euros in every ten are tied to these events.
The eruption on La Palma was followed by damages from other phenomena, including rain, frost, and wind, which together accounted for 58% of the compensation. By geographic region, a quarter of the volcano-related compensation, including heatstroke effects, went to the Canary Islands, with Castilla-La Mancha receiving 12% and Navarra showing the highest per capita production cost. At 124 euros per person, Navarra registered the largest per capita impact, surpassing even the Canary Islands by 17% in terms of per capita burden.
From the financial loss figure of 1.3 billion euros, the research indicates that 62% affected households and 19% impacted businesses and warehouses. The Canary Islands emerged as the most affected community in 2021, accounting for 41% of damages, followed by Andalusia with 15% and Navarra with 13%.
1.492 million people saw a drop in income
In terms of income disruption, Spanish companies reported a direct loss of 1.492 million euros, with 99% of these losses concentrated in the agriculture and livestock sector. Data from Rain and floods identified these as the primary sources of the revenue declines, followed by frost and wind disturbances.
Geographic distribution of the impact shows that nearly a quarter of the activity loss was concentrated in Castilla-La Mancha, Valencia, and Aragon. Navarra reported the highest per capita cost of production. The fall in earnings per person was particularly noticeable in La Rioja due to flood-related job losses of about 70 euros per inhabitant.
Looking at turnover, the directly affected companies experienced a decline of about 492 million euros, while contracts with suppliers and service providers added another 1.243 billion euros in lost revenue. Both direct and indirect effects had a knock-on impact on wages and consumption, with Verónica López indicating a renewed contraction of roughly 478 million across several companies.
Collectively, the disasters caused a total revenue shortfall approaching 3.2 billion euros, with about half of these losses offset by the compensation consortium and Agroseguro.
The aggregate effect on GDP was estimated at 1.126 billion euros, roughly 0.1 percent of Spain’s GDP for 2021, signaling an economic contraction associated with the events and placing about 23,000 jobs at risk, half of them in utilities. In terms of critical infrastructure, the 522 million euros in impacts drew attention to Filomena as the most damaging phenomenon, while hail and heavy rainfall in May also produced notable economic effects. The food sector recorded the strongest impact, followed by transportation, health, energy, and water sectors.
The overall assessment underscores how multiple natural hazards translated into widespread economic disruption across sectors, regions, and households throughout 2021.