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 of natural catastrophes as it experienced last year, but the more than 700 catastrophes caused more economic and insured losses than in 2002.[@@]
A report issued by insurer Munich Re, based in Germany, said that more than 50,000 people were killed in natural catastrophes during the year, compared to 11,000 in 2002. The worst of these events were the heat wave in Europe and the earthquake in Iran?each event claiming more than 20,000 lives.
Economic losses were more than $60 billion, compared to $55 billion in 2002. Insured losses rose from $11.5 billion last year to $15 billion, with the tornadoes in the Midwest of the U.S. in May costing $3 billion alone.
Munich Re said its figures were from its own data.
The 70 earthquakes around the world caused more than $6 billion in economic damage but only about $100 million in insured losses. A recent California earthquake of a magnitude 6.5 caused little dramatic damage because of its location. However, the carrier noted, the quake is a reminder of the high exposure to earthquakes both San Francisco and Los Angeles face in the region.
In May an earthquake of a magnitude 6.8 on the Richter scale hit Algeria, killing 2,200 people. It generated a tsunami in the Mediterranean that eventually damaged 150 yachts. A 6.4 quake in China, in February, destroyed or damaged 70,000 buildings.
Estimates of the death toll from the earthquake in Iran have raised the figure of the dead well above 20,000.
Windstorm damage claimed about three-fourths of all insured losses caused by natural catastrophes, Munich Re said. April and May 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 the continent was Calvann, that struck France, Switzerland and Germany in January. Despite winds exceeding 124 mph, the storm caused moderate insured losses of $300 million.
Climate change was also a concern, creating drought, record heat and flooding.
The major insured losses were from wildfires in California, Australia, southwest Europe and Canada. California alone accounted for $2 billion in insured losses and represented about 60 percent of economic losses.
Flooding in France caused $1 billion in insured losses and China suffered $8 billion in economic losses.
Insurers must become more prepared for the increased risks and losses associated with these changes, said Stefan Heyd, responsible for Munich Re’s board of management for corporate underwriting, in a statement. Insurers will need to adjust premiums and limit their exposures, he noted.