'In coming decades, the effects of climate change will make themselves felt particularly in emerging markets'
A report by Munich Re has cited global warming as a factor in its study of the changing risk potential of India. 'Topics Geo – Natural catastrophes 2007' says that annual monsoon rainfall in India is becoming increasingly intense and the study anticipates an increase in claims resulting from extreme weather conditions, described as “very probably due to global warming”.
At the same time, the rapid development of India's economy is accompanied by growing prosperity, leading to higher concentrations of values – particularly in exposed regions like Mumbai. This and the strong rise in demand for insurance protection has driven up insured losses in recent years. Whilst annual losses averaged no more than US$ 5m between 1980 and 2004, the figure in 2006 alone exceeded US$ 400m.
"Climate change presents a particular challenge to fast-growing emerging countries like India", says Torsten Jeworrek from Munich Re's Board of Management. "In conjunction with greater prosperity and the effects of climate change, there is a distinct increase in losses. For this reason, our geo risk researchers undertake intensive examinations of the changing risk situation in countries like India. We use this special know-how to ensure our underwriting is based on risk-adequate prices, terms and conditions and also make it available to our clients as a service."
The report states: “On one day in 2005, for example, Mumbai recorded 944 mm of rain, the highest level of precipitation ever measured on a single day in India. The number of intense precipitation events (at least 100 mm/day) has risen by about a third since 1950.”
The current issue of 'Topics Geo' also looks at the windstorm events of the past year: the 2007 hurricane season in the North Atlantic, the winter storms in Europe and the United States, and the cyclones in Asia. It analyses the floods in the UK, the wild land fires in California, and the earthquake in Niigata, Japan.
The losses caused by natural catastrophes in 2007 were within the range expected and in line with the trend observed in recent years. Overall losses throughout the world came to about US$ 82bn, of which nearly US$ 30bn was carried by the insurance industry. Losses were much higher than in the previous year, when they dropped to an exceptionally low level. There were 960 natural events in 2007 (compared with 850 in 2006), the highest figure recorded since 1974, when Munich Re started its systematic inventory in the NatCatService database.