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Low Losses But Wilder Weather in 2009 (updated)
Two reports highlight the low severity of 2009's natural catastrophe losses and the continued impact of high frequency and climate change.
By MATTHEW BRODSKY, senior editor/Web editor of Risk & Insurance® The past year might have been a snoozer when it came to natural megacatastrophes, particularly in the United States or other Western nations. According to two year-end reports from Munich Re and Aon Benfield, however, severe weather still had a starring, if not concerning, role in 2009.
Munich Re's research revealed that severe weather caused as much as 45 percent of the $22 billion in insured catastrophe losses from "destructive natural hazard events," which also include wildfires and earthquakes. Overall, these natural hazard events totaled 850 in 2009, versus the average over the last 10 years of 770 annual recorded events. In the minds of the Munich Re researchers, of particular note last year was the rise of "moderately severe natural catastrophes" and individual severe-weather-related losses, three of whicheach cost insurers more than $1 billion in the United States alone. The number of major weather-related natural catastrophes has tripled since 1950, by Munich Re's calculations. Climate change contributes to these trends, according to the Munich-based reinsurance giant.. "Initial analyses indicate that, apart from socio-economic factors, this is already due in part to climate change," said Peter Hoppe, head of Munich Re's Geo Risks Research, in a press release. Speaking to Risk & Insurance® about the recent COP15 United Nations Climate Change Conference in Copenhagen, Ernst Rauch, head of Munich Re's Corporate Climate Center, noted how the reinsurer first saw something troubling in its natural catastrophe data in 1973 and launched a climate change research initiative then. The report from reinsurance intermediary Aon Benfield does not make that direct link between increasing frequency and severity of weather-related events and climate change--though the researchers do include a section called the "2009 Climate Review." In it, the authors discuss how 2009 was the 32nd consecutive year of above-average global temperatures and the fifth warmest year on record since 1880, when global land and ocean temperatures were first recorded. Steve Drews, part of the firm's Analytics team, stressed, however, that several factors could lead to weather-related losses, such as naturally occurring ocean and atmospheric cycles and population and property growth in high-risk areas. "Since all of these factors can contribute to the increase in losses experienced in catastrophic events, a link to global climate change cannot be determined at this time," Drews explained in an e-mail to Risk & Insurance®. As for the lack of massive losses in 2009, both Munich Re's and Aon Benfield's findings are in agreement. Aon Benfield counted 222 separate natural catastrophe events in 2009, leading to $58 billion in total economic losses and $20 billion in insured losses. Munich Re counted 850 events that caused in total $50 billion in economic losses and $22 billion in insured losses. In 2008, the comparable figures were $200 billion and $50 billion, respectively. No single event in 2009 caused greater than $5 billion in insured losses. Windstorm Klaus, which affected Europe in January 2009, came closest at $3.3 billion. Thankfully, 2009 was "well below average" regarding the number of deaths caused by natural catastrophes, with about 10,000 fatalities by Munich Re's estimates. January 6, 2010 Copyright 2010© LRP Publications |
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