A report by the Munich Re Group has shown that financial losses from natural catastrophes were lower in 2015 than in 2009. Nevertheless, the number of victims remains high. EURACTIV’s partner Der Tagesspiegel reports.
On the 25 April 2015, around noon, an earthquake measuring 7.8 on the Richter scale struck northwest of the Nepalese capital of Kathmandu. In the high mountain regions, landslides buried entire villages. In urban areas, countless buildings were destroyed, including many culturally and historically-valuable structures. Around 9,000 people lost their lives and half a million were left homeless. It could have been so much worse. The quake hit the mountain nation on a Saturday, when children were at home, not in the many school buildings that were left flattened.
Worst of the worst
According to the report compiled by the reinsurance company Munich Re, published on Monday (4 January), for last year, the Nepalese earthquake was the most deadly and – with a damages bill of $4.8 billion – was also the most expensive disaster. Of the 23,000 people killed worldwide in natural disasters last year, the Nepal quake caused the most casualties, followed by the heatwave that hit India and Pakistan between May and June.
The high temperatures claimed 3,670 lives. In comparison to 2014, when 7,700 people were killed, there has been a dramatic increase in the number of deaths. However, the 2015 figure is still below the long-term average of 54,000 cases a year.
Relatively low financial losses
In contrast, the financial outlook is not so disastrous. Ultimately, 2015 showed the fewest losses since 2009. Overall, natural disasters totalled $90 billion, around $20 billion less than in 2014. However, only around $27 billion was insured.
El Niño wreaks havoc
“In 2015, in terms of financial losses, we were lucky,” said Peter Höppe, head of GeoRisk, the world’s largest reinsurance company. “Powerful tropical weather systems hit – if at all – sparsely populated areas,” he added. Insurers also benefitted from El Niño. The climate phenomenon occurs every three to seven years and involves the halting or even reversal of the normal ocean currents in the South Pacific. The upper levels of water, therefore, become warmer in the eastern part of the South Pacific, normally around Christmas time. The consequence is that, while hurricane activity in the North Atlantic is decreased, many developing countries are hit by devastating floods and heatwaves.
In the northeast Pacific, Munich Re reported on 26 hurricanes, 10 more than usual. Most of the storms failed to make landfall though. Only Hurricane Patricia hit Mexico in October, with winds of up to 340 km/h, in the Cuixmala region, which is relatively sparsely populated.
El Niño had considerable impact on South America, Africa and South East Asia. Worldwide, drought and heatwaves racked up costs of $12 billion, of which only $880 million was insured. The most damage was incurred in Europe in the summer, when high temperatures and drought caused damage totalling $2 billion, with only a tenth insured.
First heat. Now rain. The floods in the North of England are likely to have caused billions in damages. Munich Re estimates that the floodwaters will leave a bill of some €1 billion in their wake. Storms Eva and Frank caused rivers to burst their banks, particularly in Yorkshire. According to their report, the consequences of Storm Frank were not foreseeable. Northern England and Scotland had already been hit by Storm Desmond, which Munich Re estimated to have caused around €1.4 billion in damages. Half of which will have to be paid by insurers.
Climate change culpable
The insurer’s climate experts are convinced that climate change is responsible for the prevalence of such powerful storms. While in Central Europe mild temperatures and calm weather prevailed, the UK and Ireland were hit by powerful storms and rain. Such persistent weather conditions intensified due to changes in the location and track of the high-altitude winds (jet stream).
“Recent studies indicate that this may be linked to the warming of the Arctic regions and thus influenced by climate change,” said the report. PwC consultants estimated that the combined costs of Desmond and Eva could range between €1.2 and 1.7 billion. Of that sum, around €670-890 million is thought to have been insured. KPMG estimated that the total damages and costs needed to protect against further flooding could reach nearly €7 billion.
Niklas batters Germany
In Germany, windstorm Niklas caused the most damage. German insurers are liable for €750 million, reported the GDV insurance association at the end of December. This made Niklas responsible for around a third of all property insurance expenditure last year.
This article was also published by EURACTIV Germany.