Munich:
The first half of 2018 was fortunate in that natural disasters across the world caused significantly lower losses than usual.
According to provisional figures released by Munich Re, overall losses were around US$ 33bn, the lowest level since 2005 (US$ 29bn after adjustment for inflation). The overall losses of US$ 33bn were roughly half those of the previous year and of the price-adjusted average for the last 30 years (US$ 65bn and US$ 68.3bn respectively).
At approximately US$ 17bn, insured losses were less than in the previous year (US$ 25.5bn), but more or less matched the average for the first six months over the last 30 years (US$ 17.5bn).
However, individual events did cause high losses for those concerned, for example crop losses in the agricultural sector as a result of drought in Europe.
Also, it is the second half of the year that usually brings higher losses. For example, in 2017 the series of major hurricanes, Harvey, Irma and Maria, pushed overall losses for the year to US$ 340bn.
Some 3,000 people lost their lives in natural disasters in the first half of 2018, a lower figure than the 5,540 for the corresponding period last year. This reduction is particularly encouraging when compared with the long-term average of 28,000.
The Munich Re’s NatCatSERVICE database registered 430 relevant natural disasters in the first half of 2018, more than the long-term average (250) and the previous year (380).
Munich Re Board member Torsten Jeworrek said, “Following a period of extreme disasters with record losses, it is nice to be able to record a phase with low losses. Of course, looking at a short timespan may distort the true picture. The most important thing is to understand the long-term developments. That is why we must continue to make every effort to understand the background to natural disasters, and provide safeguards against them in the form of intelligent prevention measures. This is borne out by statistics on flooding losses in Europe, which have generally decreased thanks to investment in flood protection and control.”
Thunderstorms and drought in Europe
An unusual weather pattern developed in central Europe in May and early June. In the south and west of Germany, as well as in France, a series of very slow-moving thunderstorms formed in warm, moist air masses, triggering flash floods in many places. The flooding was caused by torrential rainfall that the storm sewers were unable to cope with. Overall losses from the storms came to around €1.6bn, with insured losses of at least €900m.
On the whole, losses caused by severe thunderstorms are rising in Germany – even after taking increasing values into account. While windstorm and hail losses enjoy a high level of insurance coverage, the share of insured losses from flash floods is usually well below 50%.
Ernst Rauch, Chief Climate and Geo Scientist at Munich Re, explained the background: “Although individual events like these cannot be attributed to climate change, climate model studies show that one future effect of the increase in temperature will be more frequent periods of heat and drought, along with more intensive convective rainfall. So these weather processes roughly fit the pattern that may be expected more frequently in future as a consequence of climate change.”