Munich Re urges greater loss prevention efforts

Munich Re recently released a report on 2012 cat losses, which indicated that US losses accounted for a far higher proportion of natural cat losses than usual.

The report argued that insured losses were so large while fatalities remained fairly limited—9,500 compared to a 10 year average of 106,000, possibly because few losses were experienced in emerging countries—indicates that greater loss prevention efforts are needed even in developed nations.

According to Munich Re board member Torston Jeworrk: “it would certainly be possible to protect conurbations like New York better from the effects of storm surges [like those experienced during Hurricane Sandy]. Such action would make economic sense and insurers could also reflect the reduced exposure in their pricing.”

According to professor Peter Höppe, Sandy was “a truly exceptional storm” but should not be written off as a fluke, particularly when considered in conjunction with the costly drought that plagued the USA’s Corn Belt through the summer.

Höppe commented: “these two catastrophes clearly demonstrate the type of events we can expect to contend with more often in the future. It is not possible, of course, to attribute individual events to climate change, each theoretically being possible in isolation.

"However, numerous studies assume a rise in summer drought periods in North America in the future and an increasing probability of severe cyclones relatively far north along the US East Coast in the long term. The rise in sea level caused by climate change will further increase the risk of storm surge. And, with no apparent prospect of progress in international climate negotiations like those held recently in Doha, adaptation to such hazards using suitable protective measures is absolutely essential.”