Munich:
According to Munich Re, in 2019 ,globally 820 natural catastrophes caused overall losses of US$ 150bn, which is broadly in line with the inflation-adjusted average of the past 30 years. A smaller portion of losses was insured compared with 2018: about US$ 52bn. This was due, among other things, to the high share of flood losses, which are often not insured to the same extent as wind damage in most industrial countries.
The insured portion of overall losses during the year, slightly above 35 per cent, matches the average of the past ten years. This is evidence that large sections of the market remain uninsured, especially in emerging and developing countries, said the Munich Re report released on Wednesday.
Globally, in 2019, about 9,000 people lost their lives in natural catastrophes compared with 15,000 in 2018. This confirms the overall trend towards lower numbers of victims thanks to better prevention measures. On average over the past 30 years, about 52,000 people per year have lost their lives in natural catastrophes.
Due to the lack of severe hurricanes, the US share of global natural catastrophe losses was lower than usual (31% of overall global losses compared with the long-term average of 35%).
A combination of heatwaves and severe hailstorms were the greatest cause of losses in Europe.Overall losses from the summer storms in Europe were US$ 2.5bn (€2.2bn), with insured losses of about US$ 0.9bn (€0.8bn).
Torsten Jeworrek, member of the Board of Management, commented, “The severe cyclones in 2019 have highlighted the importance of knowledge about changes in risk. Natural climate variations influence weather catastrophes from year to year. Longer-term climate change effects can already be felt and seen. Buildings and infrastructure must be made more resistant in order to reverse the increasing trend in losses. This will enable insurance to be more effective and support the remaining financial losses.''
Though, individual events cannot be directly attributed to climate change,recent studies have shown, nonetheless, that in the long term the environmental conditions for bushfires have become more favourable – especially in the south and east of Australia, said the Munich report.
Ernst Rauch,Chief Climate and Geoscientist at Munich Re, commented: “Although hailstorms are localised, they can cause extreme damage and can even be life-threatening. Recent scientific studies have shown that we can expect hailstorms to increase in many regions as a consequence of climate change. It is also clear in this case: Measures such as better early-warning systems and more resistant building materials are important in order to mitigate against long-term increases in losses.”
As in 2018, Japan was again struck by very severe typhoons. Hagibis and Faxai were two equally severe tropical cyclones which hit the Tokyo area.
The cyclones were the two costliest natural catastrophes of the year in terms of both overall losses and insured losses. According to preliminary estimates, overall losses from Hagibis totalled US$ 17bn, with insured losses of about US$ 10bn. Faxai caused estimated overall losses of about US$ 9bn, with insured losses of about US$ 7bn due to the greater share of more heavily insured storm losses.
This year’s typhoon season was again, as in 2018, subject to the “El Niño Modoki” effect, a particular phase of natural climate oscillation, which causes variations in water temperatures in the tropical Pacific Ocean. Under these conditions, typhoons steer more frequently towards Japan. All in all, the typhoon season in the northwest Pacific was close to the long-term average in terms of the number of storms.
Ernst Rauch at Munich Re, said: “The typhoon season shows that we must consider short-term natural climate variations as well as long-term trends due to climate change. In particular, cyclones are becoming more frequently associated with extreme precipitation, as with Hagibis in Japan in 2019 and Hurricane Harvey in 2017 in the US. Recognising these changes can form the basis for further preventive measures to reduce losses.”
Overall losses from the California wildfire season were US$ 1.1bn, and about US$ 0.8bn were insured. Despite the lower losses in 2019, this does not change the sharply rising long-term trend for forest area burned and wildfire losses in the US.The bushfire season in Australia has already been very severe is expected to continue during the midsummer months of January and February.
The greatest humanitarian catastrophe of the year was Cyclone Idai, which hit Mozambique and neighbouring countries in March. More than 1,000 people died and hundreds of thousands lost everything they had.
These extreme consequences clearly show that, particularly in poor countries, human lives and hard-won economic growth must be better protected. UN organisations, the World Bank, companies (including Munich Re) and other institutions founded the Insurance Development Forum (IDF) in 2016, which supports insurance solutions for developing countries through the G7 “InsuResilience Global Partnership” initiative.