Disaster losses unlikely to shrink, says AIR

It is next to impossible to reduce economic losses from disasters, which are currently at $240 billion per year.

This was the finding of a joint catastrophe modelling study by the United Nations office for disaster risk reduction (UNISDR) and catastrophe modelling firm AIR Worldwide, presented at the Third UN World Conference on Disaster Risk Reduction.

Dr Milan Simic, senior vice president of AIR Worldwide, said the study normalised the economic losses from major natural disasters over the last twenty years and found that they oscillate around a baseline value of $240 billion.

This is close to the $250 billion to $300 billion estimate of current annual levels of natural and man-made disaster losses presented in UNISDR’s 2015 global assessment report for disaster risk reduction.

In 2014, Bermuda was hit by Hurricane Gonzalo, with insured losses estimated to be between $200 million and $400 million by catastrophe modelling firm AIR Worldwide.

Simic said: “What the study tells us that it is next to impossible to reduce existing levels of economic losses but that they provide a baseline and a context for improving on key areas of development over the lifetime of the new framework for disaster risk reduction which hopefully will be adopted tomorrow.”

Jerry Velasquez, UNISDR’s chief of advocacy and outreach, said: “This study tells us that the way we do development is the reason why economic losses are so high. Development drivers are stronger drivers of the increase of risks than hazards themselves. In order to limit economic losses in the future, we need to improve urban planning and make economic growth resilient.”

The study recommends a focus on improving the availability of economic loss data, cost benefit analyses of measures such as land-use and urban planning, and the promotion of risk transfer.