Despite the low level of losses, 2007 had more catastrophes than any other year on record, reveals Angelika Wirtz.
2007 was a year marked by weather-related natural catastrophes. Roughly three-quarters of all loss events were windstorms or floods. The costs to be borne by the world’s economies exceeded $56bn, almost half of which involved insured losses.
In general, the insurance industry had to cope with far greater natural catastrophe losses in 2007 than in the year before, when losses were exceptionally low. Despite the general absence of extreme events, overall losses came to roughly $75bn – an increase of about 50% on 2006.
At just under $30bn, insured losses were almost double those of 2006. 16,000 people died throughout the world as a result of natural catastrophes. The worst human disaster was caused in mid-November by Cyclone Sidr, which devastated coastal areas of Bangladesh. The toll included 3,300 people killed, 50,000 injured, and three million homeless.
The largest share of the insured losses was registered in Europe. Winter Storm Kyrill, which crossed parts of Europe in mid-January, and the UK floods in June and July cost the insurance industry almost $12bn. As far as overall losses are concerned, the costliest event was the earthquake of 16 July in Japan, with losses totalling $12.5bn, although the insurance industry was hardly affected.
In 2007, there were more than 950 natural catastrophes, the highest figure Munich Re has ever registered since it began keeping a systematic record of catastrophes.
“In 2007, there were more than 950 natural catastrophes, the highest figure Munich Re has ever registered since it began keeping a systematic record of catastrophes.
Angelika Wirtz Munich Re's NatCatService
Since 1950 there has been a long-term upward trend in the number of events and the volume of economic and insured losses. Whilst there were roughly two great catastrophes a year in the 1950s, the average has risen to six in the years since 2000.
To a large degree, the observed increase in losses is due to socio-economic changes: increasing concentrations of values, rising population figures, and the settlement and industrialisation of exposed areas. As the long-term increase in natural catastrophes mainly relates to weather-related events, however, it is probable that changes in weather patterns – driven by climate change – are also making a substantial contribution to the trend in losses.
Munich Re’s NatCatService