- Category: Business
07 Jan 2013
- Published on Monday, 07 January 2013 09:35
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Natural disasters in 2012 cost $160 billion worth of losses worldwide, according to Munich Re, the world’s largest reinsurance firm.
Global insured losses, on the other hand, cost $65 billion.
Approximately 67 percent of the total losses and 90 percent of insured losses globally were from the United States, with Hurricane Sandy coming in as the single-costliest disaster of the year with $50 billion in overall losses and $25 billion in insured losses.
“Had it not been for this exceptional storm, losses would have been very low in 2012,” noted Munich Re.
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Sandy, which made landfall on October 29 near Atlantic City on the U.S. East Coast, to the south of New York, has become the largest Atlantic hurricane on record and the second-costliest Atlantic hurricane behind Hurricane Katrina.
Even before it made landfall in the U.S., Sandy had killed about 210 people across Haiti, Jamaica and Cuba, and in other Caribbean islands.
“The heavy losses caused by weather-related natural catastrophes in the U.S.A. showed that greater loss-prevention efforts are needed,” said Torsten Jeworrek, Munich Re Board member.
The second-most catastrophic event that delivered $20 billion losses was the summer-long drought that also occurred in the U.S. Plaguing the Corn Belt in the Midwest and surrounding states, the event badly affected most of the country’s main agricultural crops, such as corn and soybean.
Of the total losses in 2012, roughly $15-17 billion was covered by the public-private multi-peril crop insurance programme, making it the biggest loss in the U.S. agricultural insurance history. For years, insured losses in the agriculture sector normally averaged only about $9 billion.
In addition to this, 2012 has been touted as the U.S.’s warmest year since 1895, when even June and July largely failed to produce the usual rainfall.
“These two catastrophes clearly demonstrate the type of events we can expect to contend with more often in the future. It is not possible, of course, to attribute individual events to climate change, each theoretically being possible in isolation,” said Prof. Peter Höppe, Head of Munich Re's Geo Risks Research.
On the contrary, Prof. Höppe noted several studies that presume an increase in summer drought periods in North America over the coming years and an escalating probability of severe cyclones somewhat far north along the U.S. East Coast in the future. The rise in sea level brought by climate change will bring increasingly storms.
“[With] no apparent prospect of progress in international climate negotiations like those held recently in Doha, adaptation to such hazards using suitable protective measures is absolutely essential,” stressed Prof. Höppe.
Less than in 2011
Munich Re did note that the losses in 2012 were less than in 2011, when record figures climbed to as much as $400 billion, due to major earthquakes in Japan and New Zealand and severe floods in Thailand.
Insured losses for 2011 came to $119 billion.
Meanwhile, around 9,500 people died in natural catastrophes in 2012 compared with the ten-year average of 106,000.
This was mainly because during the previous year, few severe natural disasters hit emerging and developing countries, where natural disasters are expected to have more overwhelming impacts when it comes to human lives.
In terms of casualties, Typhoon Bopha, which struck the Philippines in December, is 2012’s most devastating catastrophe, with over 1,000 deaths recorded and many people that remain unaccounted for. Insured losses were minor due to the low insurance density of the country. – C. Dominguez