Earthquakes and tropical cyclones made 2004 an extraordinary year, according to Munich Re's annual review of natural catastrophes. Exceptional natural hazards occurred in areas that are seldom affected, and the insurance industry sustained record losses.

The tsunami in South Asia was the most significant disaster of the year. The catastrophe, triggered by a magnitude 9.0 earthquake, claimed the lives of more than 250,000 and injured hundreds of thousands. Current estimates put the overall economic loss at more than $10 billion and insured losses between $1 to $2 billion.

The tsunami has implications for science, politics, and the insurance industry, the report's authors noted. In addition to improving monitoring and warning systems, disaster planning and mitigation efforts must include enhancing risk awareness among decision makers and the population potentially affected; regulating land use, particularly in highly exposed coastal areas; and reviewing and analyzing the covers in all the lines of insurance involved.

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