![](/sites/default/files/styles/full_width/public/holdenbeach5.jpg?itok=puq3aufQ)
Content supplied by re-insurer Munich Re
Losses from natural catastrophes in 2015 were again lower than in the previous year.
The natural climate phenomenon El Niño reduced hurricane activity in the North Atlantic, while it brought major floods and heatwaves to many developing and emerging countries.
The deadliest catastrophe, and also the costliest in terms of overall losses, was the Nepal earthquake in April, where some 9,000 people lost their lives and overall losses totalled US$ 4.8 bln.
“In terms of financial losses, we were somewhat fortunate in 2015: Strong tropical cyclones frequently only hit sparsely populated areas or did not make landfall at all. In the North Atlantic, El Niño helped to curtail the development of heavy storms. Measures to reduce loss susceptibility have also had a positive effect”, explained Peter Höppe, Head of Munich Re's Geo Risks Research Unit.
However, the comparatively low losses are no reason to become complacent: “Scientists believe that in 2016 the strong El Niño phase might be followed by its twin sister, La Niña. Both versions of the climate oscillation ENSO (El Niño/Southern Oscillation) in the Pacific influence weather extremes throughout the world. A La Niña phase would promote the development of hurricanes in the North Atlantic, for example.”
The year at a glance
- 2015 saw the lowest losses of any year since 2009. Overall losses totalled US$ 90bn (previous year US$ 110bn), of which roughly US$ 27bn (US$ 31bn) was insured.
- The loss amounts were also below the long-term inflation-adjusted average for the period 1985–2014 (overall losses US$ 130bn, insured losses US$ 34bn).
- The natural catastrophes of the past year claimed 23,000 lives, substantially more than the previous year's figure of 7,700. However, the number of victims was still some way below the annual average for the last 30 years (54,000).
- For the first time, more than a thousand loss events were recorded in a single year. However, this is primarily due to improved communication of such events. In particularly benign years, a lot of minor events are recorded.
The year's most devastating natural catastrophe was the earthquake in Nepal, which occurred on 25 April northwest of the capital Kathmandu and reached a magnitude of 7.8. Nepal and the neighbouring states of India, China and Bangladesh are all highly exposed to earthquakes, as this is where the Indian and Eurasian continental plates meet. The Indian plate moves about 4–5 cm north each year and pushes up the world's highest mountain range, the Himalayas, by about a centimetre each year. This is what causes these powerful earthquakes.
And that was also what happened just before midday on 25 April near the town of Gorkha. The tectonic plates were displaced by up to four metres at a depth of 10–25 km. Countless buildings, including many historically important sites, were destroyed. Around 9,000 people were killed and 500,000 were made homeless. Landslides occurred in the mountains to the north, which buried entire villages in the valleys. It is believed that many more would have died if the earthquake had not struck at Saturday lunchtime. Some 6,000 school buildings throughout the country were either badly damaged or destroyed. Thankfully, there are no lessons on a Saturday.
As is so often the case in developing countries, only a fraction of the US$ 4.8 bln in overall losses caused by the quake and the aftershocks was insured (US$ 210m).
“Just like in Nepal, the proportion of insured losses for catastrophes in other developing and emerging countries remains very low”, explained Torsten Jeworrek, member of Munich Re’s Board of Management. “The insurance industry is exploring new avenues to close this gap in cover and thus to help people better cope with material losses after a catastrophe.”
For example, Munich Re participates as a risk carrier in risk pools in the Caribbean (Caribbean Catastrophe Risk Insurance Facility, CCRIF), for Pacific island states (Pacific Catastrophe Risk Assessment & Finance Initiative, PCRAFI) and in Africa (African Risk Capacity, ARC). These recently established pools offer covers throughout these regions for risks from weather catastrophes and also for earthquakes/tsunamis in some cases. “These are pioneering solutions, especially as they also permit insurance for the countries that suffer most from the consequences of climate change, but have thus far not been able to organise cover”, added Jeworrek.
Some 94% of loss-relevant natural catastrophes in 2015 were weather-related events. Particularly evident was the influence of the climate oscillation ENSO (El Niño/Southern Oscillation) in the Pacific, which influences weather extremes in many parts of the world. Due to the strong El Niño phase, the number of 11 tropical cyclones in the North Atlantic was below the average for the warm phase which has been ongoing since 1995 (14.8). Of these cyclones, only four reached hurricane strength (average 7.6). Overall and insured losses came to just a fraction of the average of previous years.
On the other hand, El Niño promoted the development of intense tropical cyclones in the northeastern Pacific, partly due to the higher water temperatures it brings. A total of 26 cyclones (long-term average 15.6) developed there, 16 of which reached hurricane strength (8,7). 11 (4.1) grew to severe hurricanes. Many storms in the northeastern Pacific do not make landfall. However, one was particularly noteworthy: Hurricane Patricia was to become one of the strongest storms ever recorded anywhere and the most powerful in the northeastern Pacific ever to make landfall. With peak wind speeds of up to 340 km/h, Patricia made landfall on 23 October (very late in the hurricane season) close to Cuixmala in the Mexican state of Jalisco. Fortunately, this region contains the Chamela-Cuixmala Biosphere Reserve and is therefore very sparsely populated. The storm was also relatively small in size and was unable to cause the sort of damage that many less powerful but larger storms usually do.
Numerous buildings were destroyed in the areas hit by the storm. Overall losses came to more than US$ 0.5bn, with only a small portion of this insured. Had the storm reached the nearby holiday resort of Puerto Vallarta, the damage and losses would have been much greater. “Besides this fortuitous set of circumstances, timely precautions and early warnings helped bring people to safety and prevent losses. One such measure was the prompt evacuation of affected areas ordered by the government”, explained Höppe.
The El Niño phase had a considerable effect on droughts and heatwaves, especially in South America, Africa and Southeast Asia. Overall losses worldwide from such events last year came to US$ 12bn, of which US$ 880m was insured. However, the highest losses from heatwave and drought – albeit not influenced by El Niño – were caused by the hot, dry summer in Europe. The overall loss totalled some US$ 2bn (€1.9bn); only about a tenth of this was insured.
The costliest natural catastrophe for the insurance industry in 2015 was the series of winter storms that struck the northeastern United States and Canada in February. Insured losses came to US$ 2.1bn; overall losses were US$ 2.8bn. Just like the previous year, the entire winter in the northeastern USA was unusually cold and snowy. In Boston, almost three metres of snow fell over the winter months – an absolute record.
North America is regularly hit by many storms each winter. In spite of potential losses from snow, freezing rain and the storms themselves, these events do not usually harbour the same loss potential as tropical cyclones, for example. Nevertheless, a large number of storms over the whole winter can produce significant losses in total. There were direct overall losses of US$ 4.6bn in the USA from the harsh winter of 2014/15, of which US$ 3.4bn was insured. Losses were therefore even higher than in the winter of 2013/14 (US$ 4.4bn, insured losses US$ 2.5bn).
Two tornado outbreaks across the southern USA in late December 2015 brought a destructive and deadly end to what had been a relatively quiet year for severe thunderstorms in the USA. The December outbreaks included two tornadoes of the second strongest category EF4, with wind speeds up to 300 km/h. One of them carved a path through a densely populated suburb of Dallas. Both tornadoes each took the lives of at least ten people. Reliable loss estimates are not yet available. The current El Niño probably had an impact on these events, as winter and springtime tornado outbreaks occur with a higher frequency close to the Gulf of Mexico coasts under El Niño conditions.
There were notable floods in Europe in December 2015. Storm Desmond hit Great Britain on the weekend of 5 December. As it was carrying a lot of moisture from the Caribbean, it developed a so-called “atmospheric river”, which brought extreme rainfall in the county of Cumbria and in the border area with Scotland. In places, there was as much as 200 litres of rain per square metre, resulting in serious flooding. The storm then swept across Scandinavia. Initial estimates suggest losses from this storm system over northern Europe could reach US$ 1.5bn (€ 1.4bn), with expected insured losses of US$ 0.8bn (€ 0.7bn).
Further storms and heavy rain brought more floods to the north of England towards the end of the year. Storm Eva in particular led to severe flooding in Yorkshire, with large parts of the city of York submerged under water. Although it is too early to be conclusive, the overall losses from these floods could well be over € 1bn. The flooding occurred in areas that had already been badly hit by floods several years before. Since then, flood protection measures have been carried out, but they were not enough to stop the flooding from these storms.
The floods in the north of England are the result of weather conditions that persisted for several weeks, with unusually mild and calm weather in central Europe and storms and heavy rain over the British Isles. Such persistent weather conditions intensify 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.
15 Comments
That aside for the good oil and practical examples
http://www.pierpont.com.au/article.php?Ten-commandments-of-insurance-336
1: If thou knowest not thy result, declare one anyway.
This applies to all insurance companies at all times. A fortnight ago, Pierpont was chatting to Sir Arvi Parbo, who spent some time on the Zurich board. Sir Arvi observed: ``If insurance companies were honest, they'd say, `We think we made this much last year, but we won't really know for another five or 10 years'.''
As it has been so well understood for so long, nobody expects the results announced by insurance companies to be even remotely accurate. If Pierpont ever formed Blue Sky Insurance, he would first decide what he wanted his profit or loss to look like and then move the assumptions until they fitted.
Well we are screwing the elderly now with dingbat green energy policies . Who cares about them? "Winter deaths have reached a 15-year high amid warnings from experts that worse may be to come, amid growing pressures on NHS services.
There were almost 44,000 “excess deaths” between December and March last year – the largest annual rise in such figures for almost five decades.
In 2012/13, one of the worst winters on record, with the coldest March for 50 years - there were 31,000 excess deaths."
Elderly today or the 2100 kids (if you believe the hypothesis will pan out).
http://www.telegraph.co.uk/news/health/news/12015735/Winter-deaths-soar…
Little to do with Green "costs" according to that article, so looks like cherry picking and dishonest comment by mixing data points on purpose yet again. So you cherry picked a year as 2012/2103 was the colder yet only 33,000 died. For 2014/15 it was mild but most of the 44,000 deaths was due to flu vaccine failure and not so much CC ie the 'green cost" "Experts said the failure of the flu vaccine last year – which was only effective in one in three cases – was one of the key factors behind the deaths."
Also "The deaths came as NHS services struggled to cope despite unusually mild weather." ergo the energy bill for the poor wouldnt have been excessive for the poor last year.
More importantly how about that UK gas output is now in decline so its no longer cheap and has to be bought from Russia down a long pipeline which the rest of Europe has already sucked on? So the elderly are in effect paying for a lot for Ngas. Same for UK's power plants taht are moslty coal and Gas fired, it now has to be imported at great expense.
I guess you missed the bits about fuel poverty and pensioners unable to pay their heating. Gets expensive paying for all the green crackpot schemes.
"The Yorkshire-based power plant is in the process of switching from burning coal to biomass, and was awarded a £1.7bn Government subsidy contract in April 2014 for the third of its six units - subject to state aid approval.
The contract would see Drax paid a fixed price of £105 for every megawatt-hour (MWh) of biomass-fired power the unit generated until 2027 – well over double the current market price.
...the "considerable" volume of wood pellets the unit would burn each year - about 2.4 million tonnes, mostly imported from United States and South America - would be so great as to "significantly distort competition in the biomass market."
http://www.telegraph.co.uk/finance/newsbysector/energy/12082623/Blow-to…
a) The Drax plant looks like a one off so hardly a realistic example, but then you do like to cherry pick.
b) Some pensioners have always had fuel poverty, twas like that 30~40 years ago, so same, same.
c) Much of the UK's electrical generation is gas and that is likely to increase in price. The Q is what is more expensive wind and solar or fossil generation and its looking more and more like the latter.
A) wood pellts are an annual 25 million t trade. Shipped from North/South America to Europe. The trade wouldn't exist without crackpot green subsidy. Hardly a "one off".
B) what a cop out. Malaria has always killed people so lets not fix that either - even though we can. Lower the heating bill by stopping dumb green intermittent energy boon doggles.
C) the US and Oz have just started exporting gas. Uk sits on the Bowland shale. You think gas is going to get more expensive? The world is awash with the stuff
a) 25million is peanuts. Whats NZ agricultural annual output? Ok so there are some bad ideas, by clueless bureaucrats lets not forget ethanol which was perverted into a farmers subsidy, to call it green in any way is a misnomer, it was pork barrel politics to buy votes.
b) Also lets think ethanol where maize is now left mexicans hungry as the flour costs so much, such was perverted by Govn and not "greenies" as I said. Wind and solar are now approaching cost competitive or actually are when all costs are considered. Further just having "cheap" energy for a few years but having it get very expensive afterwards helps only a few for a time. Investing in a new resource however keeps the costs down longer term.
c) Bowland has issues and its still just one reasonably sized field if they are lucky,
"This approach suggests that the most-likely reserve for the Bowland Shale is approximately 42 Tcf. While this is a substantial volume of gas (roughly equivalent to the Barnett Shale accumulation in the U.S. based on a recent evaluation by the Texas Bureau of Economic Geology in press), it will hardly change the energy future of the U.K. Based on well productivity from the Barnett Shale, it will take approximately 30,000 wells to fully develop the Bowland Shale potential reserves."
8><--------
"So far, there is little geochemical data for the Bowland Shale and, while some of the data appears to be in a similar range as for the Barnett Shale, lack of comprehensive data is a risk factor in assessing the potential of the play. Each shale gas play is different and, until industry knowledge is greater, must be viewed as a “one‐off” opportunity with a considerable learning curve, unanticipated costs and commercial risk."
http://www.theoildrum.com/node/10088
So it may not even be commercial, and then there is the environmental damage from shale drilling, yes bound to go well.
Some peanuts - 25 mill t requires around 4 mill hectares - depending on yield. So about all of NZ's arable land. Set to double that area in ten years. And all the wood has to be dried to 12% and kept dry like grain. Madness. All in name of CO2 reduction green fantasy. It will never compete with the worlds abundance of natural gas other than on a local, residue based, scale.
yes on the one side is the saying, "never argue with a fool ppl may not know the difference"
On the other hand if it remains un-answered then the truth is in effect not shown, you remain quiet while evil is done. So by replying and showing the actual situation the reader has a clear choice on who to believe andin turn no reader can say " no one told me".
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.