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.
Throughout the world, natural catastrophes claimed the lives of approximately three times as many as in 2003. At the same time, the number of natural catastrophes was, at 650, no higher than the average of the last 10 years, according to the report. Economic losses totaled $145 billion, including insured losses of $44 billion. The bulk of the insured losses, $40 billion, resulted from the destructive hurricanes in the Caribbean and the United States and the record 10 typhoons in Japan.
In addition to the exceptional number of hurricanes and typhoons, cyclones occurred in parts of the Atlantic where they are not typical. In March, a hurricane formed off the Brazilian coast for the first time since observations began. This part of the South Atlantic had hitherto been classified as hurricane-free because of low water temperatures.
Another unusual event was Hurricane Alex in August, which, on its northward path, gained in intensity far from the Tropics and maintained hurricane force up to a latitude of 42?N, roughly the latitude of Boston.
"These events are further evidence that a correlation between global warming and the considerable rise in the number of extreme weather events is becoming increasingly plausible," said Prof. Peter H?ppe, head of Geo Risks Research at Munich Re. "The insurance industry must adjust the scope and price of its insurance covers to the growing risk. This risk of change must be given even more weight in the models that it uses to analyze loss potentials from windstorms and severe weather events."
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