The United States saw a higher proportion of global natural catastrophes than usual in 2012, with 90% of all insured losses worldwide attributed to the U.S., mainly due to weather-related events, major reinsurer Munich Re noted Thursday.
In 2012, natural catastrophes caused $160 billion in overall losses and $65 billion in insured losses worldwide. Roughly 67% of those overall losses were attributable to the U.S., Munich Re has suggested.
Perhaps unsurprisingly, the year's highest insured loss was caused by last fall’s “superstorm” Sandy, causing an estimated $25 billion in insured losses, the company noted in a statement on natural catastrophe statistics for 2012. Loss estimates from the storm are still uncertain, as they’ve been difficult to assess, as several companies, including Munich Re have noted.
“The heavy losses caused by weather-related natural catastrophes in the USA showed that greater loss-prevention efforts are needed,” Munich Re board member Torsten Jeworrek commented in a statement.
“It would certainly be possible to protect conurbations like New York better from the effects of storm surges. Such action would make economic sense and insurers could also reflect the reduced exposure in their pricing,” he added.
The storm also left considerable damage throughout the Caribbean and in Canada, with estimated insured losses here totaling $100 million.
Read more: Insured losses from severe weather in Canada topped $1 billion this year: IBC
Considerable drought, particularly in the U.S. Midwest, also increased losses for the 2012, which had record high temperatures. The overall agricultural crop losses in the U.S. in 2012 totalled around $20 billion, of which about $15 billion to $17 billion is covered by the public-private multi-peril crop insurance program, making it the biggest loss in U.S. agricultural insurance history. In average years, insured losses are around $9 billion, Munich Re says.
“These two catastrophes clearly demonstrate the type of events we can expect to contend with more often in the future,” says Peter Höppe, head of Munich Re's Geo Risks Research. “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 U.S. 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.”
Still, last year’s losses were significantly lower than 2011, which saw record losses after major earthquakes in Japan and New Zealand, as well as severe flooding in Thailand. In 2011, overall losses came to $400 billion and insured losses to $119 billion.
A long-term comparison suggests that 2012 losses were above the 10-year average of $50 billion for insured losses and slightly below the average of $165 billion for overall losses, Munich Re also noted.