Natural disasters cost the world more than US$150 billion last year with only about 35 per cent of the total losses being insured.
The losses were caused by 820 natural catastrophes with the damage being in line with inflation-adjusted average for the past three decades, according to Munich Re, one of the world’s largest reinsurance companies.
Additionally, 9,000 people lost their lives during these phenomena, a decrease from the 15,000 who died in 2018. “This confirms the overall trend towards lower numbers of victims thanks to better prevention measures. On average over the past 30 years, about 52,000 people per year have lost their lives in natural catastrophes.”
“Buildings and infrastructure must be made more resistant in order to reverse the increasing trend in losses. This will enable insurance to be more effective and support the remaining financial losses.”– Munich Re
The 35 per cent of insured losses, or just about US$52 billion, correlates with the average of the past decade, Munich Re said, and confirms that a large portion of the market, particularly in developing countries, remains uninsured.
Variations in climate influence weather disasters yearly, with the effects of longer-term climate change being felt already. To combat the effects of the increasing disasters, Munich Re, said “Buildings and infrastructure must be made more resistant in order to reverse the increasing trend in losses. This will enable insurance to be more effective and support the remaining financial losses.”
Interestingly, two cyclones in Japan together accounted for some US$26 billion in losses last year. Hagibis and Faxai both hit the Tokyo area causing severe damage and extensive losses as they swept across the region.
Rainfall associated with Hagibis was so extreme that as much as 1,000 millimetres fell within two days in some places.
Chief Climate and Geoscientist at Munich Re, Ernst Rauch, said “The typhoon season shows that we must consider short-term natural climate variations as well as long-term trends due to climate change. In particular, cyclones are becoming more frequently associated with extreme precipitation, as with Hagibis in Japan in 2019 and Hurricane Harvey in 2017 in the US. Recognising these changes can form the basis for further preventive measures to reduce losses.”
Individually, Hagibis and Faxai were the two most expensive natural catastrophes with the former totalling US$17 billion in losses, with about US$10 billion of it insured, and Faxai costing US$9 billion with insured losses of about US$7 billion.
Regionally, category 5 hurricane Dorian, which devastated The Bahamas, was the strongest system of the Atlantic season and caused about US$5.6 billion in total losses.
Currently, record-breaking temperatures and months of severe drought have fuelled massive bushfires in Australia. At least two dozen people have been killed, more than 6.3 million hectares ravaged and an estimated half a billion animals impacted. Preliminary estimates place losses at approximately half a billion dollars so far.