Munich Re Views '03 Cat's

By Mark E. Ruquet

NU Online News Service, Dec. 31, 9 :00 a.m.EST?The world suffered virtually the same number ofnatural catastrophes as it experienced last year, but the more than700 catastrophes caused more economic and insured losses than in2002.[@@]

A report issued by insurer Munich Re, based in Germany, saidthat more than 50,000 people were killed in natural catastrophesduring the year, compared to 11,000 in 2002. The worst of theseevents were the heat wave in Europe and the earthquake in Iran?eachevent claiming more than 20,000 lives.

Economic losses were more than $60 billion, compared to $55billion in 2002. Insured losses rose from $11.5 billion last yearto $15 billion, with the tornadoes in the Midwest of the U.S. inMay costing $3 billion alone.

Munich Re said its figures were from its own data.

The 70 earthquakes around the world caused more than $6 billionin economic damage but only about $100 million in insured losses. Arecent California earthquake of a magnitude 6.5 caused littledramatic damage because of its location. However, the carriernoted, the quake is a reminder of the high exposure to earthquakesboth San Francisco and Los Angeles face in the region.

In May an earthquake of a magnitude 6.8 on the Richter scale hitAlgeria, killing 2,200 people. It generated a tsunami in theMediterranean that eventually damaged 150 yachts. A 6.4 quake inChina, in February, destroyed or damaged 70,000 buildings.

Estimates of the death toll from the earthquake in Iran haveraised the figure of the dead well above 20,000.

Windstorm damage claimed about three-fourths of all insuredlosses caused by natural catastrophes, Munich Re said. April andMay tornadoes and hailstorms caused $5 billion in insured losses.September's Hurricane Isabel damaged or destroyed 360,000 homes,amounting to $1.7 billion in insured damage.

Europe fared better. The worst wind-driven storm to hit thecontinent was Calvann, that struck France, Switzerland and Germanyin January. Despite winds exceeding 124 mph, the storm causedmoderate insured losses of $300 million.

Climate change was also a concern, creating drought, record heatand flooding.

The major insured losses were from wildfires in California,Australia, southwest Europe and Canada. California alone accountedfor $2 billion in insured losses and represented about 60 percentof economic losses.

Flooding in France caused $1 billion in insured losses and Chinasuffered $8 billion in economic losses.

Insurers must become more prepared for the increased risks andlosses associated with these changes, said Stefan Heyd, responsiblefor Munich Re's board of management for corporate underwriting, ina statement. Insurers will need to adjust premiums and limit theirexposures, he noted.