Natural disasters increase as climate change takes effect

by Gill Montia

Story link: Natural disasters increase as climate change takes effect

Munich Re estimates that the cost of natural disasters rose to just under $30 billion during 2007, double the figure for 2006 and $5 billion more than an estimate published by Swiss Re last week.

The group, which is the world’s second-largest reinsurer, acknowledges that there have been no “mega-catastrophes” in 2007 but points out that climate change is increasing the likelihood of large scale disasters.

The worst catastrophes in terms of loss of life occurred in developing countries: over 11,000 people died in Asia and around 3,300 in Bangladesh.

The most expensive single catastrophe was the storm, Kyrill, which occurred in Europe in January and caused $5.8 billion in damages. The floods in the UK in June and July cost insurers over $6 billion.

According to Torsten Jeworrek a board member at Munich Re: “The trend in respect of weather extremes shows that climate change is already taking effect and that much more such extremes are to be expected in the future. We should not be misled by the absence of mega-catastrophes in 2007.”

Mr Jeworrek has called on the international community to intensify measures to combat climate change and has warned that premium costs are bound to rise as the insurance market takes account of new risks.

Nine-hundred-and-fifty natural catastrophes have been recorded during 2007, the highest number since Munich Re records began, in 1974.

Total economic losses amounted to around $75 billion, which is considerably less than for 2005, when severe hurricanes caused losses estimated at $220 billion, almost $100 billion of which was paid out by insurers.