2011 Disasters Make it Costliest Year on Record
Though it would be impossible to calculate the full financial cost of a rapidly warming world or asign perfect blame to the cause of any one specific weather event, that should not keep - and has not kept - some assessors of risk to try. And though private insurance companies in the United States have remained "eerily" quiet on the subject of climate change, their counterparts in Europe have been looking more closely at some of the data.
(Source: Munich RE)
Live Insurance News, an online insurance industry publication, reports:
2011 has become widely recognized in the insurance industry as the costliest year in recent history in regards to natural disasters. While estimates varying regarding the total cost of disasters, Munich Re, a reinsurance and risk modeling organization, claims that 2011 generated more than $380 billion in worldwide insured losses, only a third of which was paid by insurance companies. The disasters have caused the global insurance industry to raise prices, but Munich Re suggests that the pricing surge may be due to climate change.
Though Munich RE is a German company, it maintains a US group and included US weather events in its 2011 analysis. Science News cited some of these statistics in their report yesterday:
... US statistics show that the 552 twister-related fatalities made tornados the deadliest since 1925. There were 158 deaths associated with the Joplin, Mo., twister alone. April spawned 748 tornadoes — 226 of them on just one day. Six thunderstorm events associated with twisters chalked up losses exceeding $1 billion each and the late April tornadoes in Alabama and May twister in Joplin together racked up $6 billion in damage catapulting these events into the top 10 costliest natural catastrophes in U.S. history.
The lower Mississippi River experienced the worst flooding since 1927 owing to heavy snowmelt, saturated soils and more than 20 inches of rainfall in just one month. The estimated economic damage: $2 billion, of which only one-quarter was insured.
Texans have suffered through the worst wildfire year on record, fueled by a persistent drought. Throughout the spring of 2011, more than 3 million acres of west Texas ignited, destroying more than 200 homes and businesses (insured collectively for $50 million). In September, fires near San Antonio destroyed more than 1,600 additional homes (insured for $530 million)
Overall, last year, 820 natural catastrophes occurred — 150 fewer than the year before but well above the three-decade-long average of 630. The monetary value of 2011’s losses, however, were more than twice as high as those a year earlier and about three and a third times the previous decade’s average.
Responding to Climate Change (RTCC), a Non-Governmental Organization and an official observer to the United Nations, also cited the Munich RE research in its reporting, noting that the cost of the disasters was not just a measure of intensity, but also the frequency of severe weather:
Torsten Jeworrek, from Munich RE, believes the volume of events last year was unprecedented.
“A sequence of severe natural catastrophes like last year’s is a very rare occurrence. We had to contend with events with return periods of once every 1,000 years or even higher at the locations concerned,” he said.
Last year also saw a stark warning from Intergovernmental Panel on Climate Change, who reported increased evidence of the link between climate change and weather events, predicting that these types of events were set to become more frequent.
Costs from these disasters were not only financial either. Munich RE say around 27,000 people fell victim to natural disasters in 2011, not including the thousands who died as a result of famines following the drought in the Horn of Africa.
Given some of these observations, Marc Gunther at the GreenBiz.com wonders why insurance and re-insurance companies in the US have refrained from taking any bold public stands on the financial impacts of climate change:
You'd expect insurance companies to be among the most forceful voices in corporate America calling for the regulation greenhouse gas emissions.
Uh, no. They've been eerily quiet.
And, at the least, you'd expect them to be proudly steering some of their massive investments to clean energy or energy efficiency projects aimed at reducing emissions of greenhouse gases.
"It's surprising, in a sense, because they have so much to lose from climate change," says Sharlene Leurig, senior manager of the insurance program at Ceres, a nonprofit coalition of investor and environmental groups. But, she notes, insurance is a conservative business. The industry is all about risk, but it doesn't want to take the risk of speaking out on climate change.