17 October 2012
| PRESS RELEASE
Giant Global Risk Carrier, Munich Re: North America Most Affected By Increase In
Weather-Related Natural Catastrophes
A new study by giant insurer, Munich Re, shows that North
America has been most affected by weather-related extreme events in recent
decades. The publication "Severe weather in North America" analyzes
all kinds of weather perils and their trends. It reports and shows that the
continent has experienced the largest increases in weather-related loss events.
For the period concerned -- 1980 to 2011 -- the overall loss burden from weather catastrophes was US $1,060 billion (in 2011 values).The insured losses amounted to US $510 billion, and some 30,000 people lost their lives due to weather catastrophes in North America during this time frame. With US $62.2 billion insured losses and overall losses of US $125 billion (in original values) Hurricane Katrina in 2005 was the costliest event ever recorded in the US. Katrina was also the deadliest single storm event, claiming 1,322 lives.
The study was prepared in order to support underwriters and
clients in North America, the world's largest insurance and reinsurance market.
Using its NatCatSERVICE -- with more than 30,000 records the most comprehensive
loss data base for natural catastrophes -- Munich Re analyzes the frequency and
loss trends of different perils from an insurance perspective. The North
American continent is exposed to every type of hazardous weather peril --
tropical cyclone, thunderstorm, winter storm, tornado, wildfire, drought and
flood. One reason for this is that there is no mountain range running east to
west that separates hot from cold air.
Nowhere in the world is the rising number of natural
catastrophes more evident than in North America. The study shows a nearly
quintupled number of weather-related loss events in North America for the past
three decades, compared with an increase factor of 4 in Asia, 2.5 in Africa, 2
in Europe and 1.5 in South America. Anthropogenic climate change is believed to
contribute to this trend, though it influences various perils in different
ways. Climate change particularly affects formation of heat-waves, droughts,
intense precipitation events, and in the long run most probably also tropical
cyclone intensity. The view that weather extremes are becoming more frequent
and intense in various regions due to global warming is in keeping with current
scientific findings, as set out in the Fourth Assessment Report of the
Intergovernmental Panel on Climate Change (IPCC) as well as in the special report
on weather extremes and disasters (SREX). Up to now, however, the increasing
losses caused by weather related natural catastrophes have been primarily
driven by socio-economic factors, such as population growth, urban sprawl and
increasing wealth.
Among many other risk insights the study now provides new
evidence for the emerging impact of climate change. For thunderstorm-related
losses the analysis reveals increasing volatility and a significant long-term
upward trend in the normalized figures over the last 40 years. These figures
have been adjusted to account for factors such as increasing values, population
growth and inflation. A detailed analysis of the time series indicates that the
observed changes closely match the pattern of change in meteorological
conditions necessary for the formation of large thunderstorm cells. Thus it is
quite probable that changing climate conditions are the drivers. The climatic
changes detected are in line with the modelled changes due to human-made
climate change.
The Head of Munich Re's Geo Risks Research unit, Prof. Peter
HÃ ¶ppe, commented: "In all likelihood, we have to regard this finding as an
initial climate-change footprint in our US loss data from the last four
decades. Previously, there had not been such a strong chain of evidence. If the
first effects of climate change are already perceptible, all alerts and
measures against it have become even more pressing." HÃ ¶ppe continued that even
without changing hazard conditions, increases in population, built-up areas and
increasing values, particularly in hazard-prone regions, need to be on Munich
Re's risk radar. All stakeholders should collaborate and close ranks to support
improved adaptation. In addition, climate change mitigation measures should be
supported to limit global warming in the long term to a still manageable level.
"As North America is particularly exposed to all kinds of weather risks, it
especially would benefit from this", added HÃ ¶ppe.
Peter RÃ ¶der, Board member with responsibility for the US
market, said: "Climate change-related increases in hazards -- unlike increases
in exposure -- are not automatically reflected in the premiums. In order to
realize a sustainable model of insurance, it is crucially important for us as
risk managers to learn about this risk of change and find improved solutions
for adaptation, but also mitigation. We should prepare for the weather risk
changes that lie ahead, and nowhere more so than in North America."
Tony Kuczinski, CEO of Munich Reinsurance America, pointed
out: "This publication represents another contribution to the global dialogue
concerning weather-related activities and their causes. What is clearly evident
when the longterm data is reviewed is that losses from weather events are
trending upward. To simply say that this trend is a statistical anomaly or part
of a long-term cycle of activity misses the point of these efforts -- we must
set aside our biases and continue a meaningful dialogue in search of answers to
mitigate the losses that we are experiencing."
Losses from weather related natural catastrophes:
Storms
Storms dominate the weather loss statistics; they account
for 76% of overall losses (US $805 billion since 1980) and -- due to high insurance
penetration -- for 89% of insured losses (US $454 billion). 2005 was the major
hurricane year when Katrina, Rita and Wilma occurred and 2011 the record year
for thunderstorm related losses, when the US suffered US $26 billion in insured
property losses from that kind of events alone.
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