Munich Re’s recently released report on 2012 cat losses argues that states need to strengthen loss prevention efforts to mitigate the threat of rising insured losses.
US losses accounted for a far higher proportion of natural cat losses than usual in 2012, with losses associated with Superstorm Sandy and the severe drought in the Midwest raising questions about disaster preparedness in the US and developed countries in general.
According to Torston Jeworrk, member of the board of management at Munich Re, “it would certainly be possible to protect conurbations like New York better from the effects of storm surges [like those experienced during Superstorm Sandy]. Such action would make economic sense and insurers could also reflect the reduced exposure in their pricing.”
According to professor Peter Höppe, chief risk researcher at Munich Re, Sandy was “a truly exceptional storm”, but should not be written off as an anomaly, particularly when considered in conjunction with the costly drought that plagued the US Corn Belt this 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.”
Munich Re, loss prevention, nat cats