Insurance Giant Study Warns “Extreme Events a Game Changer”
October 25, 2012
We’re watching the progress of Hurricane Sandy as it heads on a course that may bring it ashore on the US east coast.
Mandatory disclaimer: No particular weather event can be ascribed to climate change – however, as one very well informed advisor messaged me yesterday , the set-up for this storm track is “.. certainly what I’d expect to see occurring more frequently in association with the huge ice loss this summer.”
Big re-insurer Munich Re (Re-insurers are companies that insurance companies go to for insurance) has been publishing their concerns about climate change hazards since 1973, and climate expert Peter Hoppe figured prominently in Welcome to the Rest of Our Lives, one of my most popular recent videos.
The video above describes the concerns that Munich Re has, and the company has now released a study that quantifies some of these risks. According to the vid,”between 1980 and 2011 the number of weather related loss events increased almost 5 fold” in North America.
According to Munich Re hazards expert Peter Hoeppe, “..the higher the sea surface temperature.. the higher the risk for high intensity hurricanes is..”, and we have seen those SSTs increase around the globe, due to human caused climate change.
According to the Munich Re press release on the most recent report:
A new study by 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$ 1,060bn (in 2011 values).The insured losses amounted to US$ 510bn, and some 30,000 people lost their lives due to weather catastrophes in North America during this time frame. With US$ 62.2bn insured losses and overall losses of US$ 125bn (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.