Climate change is a culprit in the long list of catastrophic natural disasters in 2010, according to insurance company Munich Re, adding to trends pointing to more frequent and riskier events.
"Fire, water, earth and air -- the four basic elements have seldom been so destructive as in 2010," said Torsten Jeworrek, chairman of Munich Re's reinsurance committee in a letter accompanying a new report.
"The overall economic loss amounted to some US$ 150bn, with earthquakes alone accounting for almost one-third of this total," Jeworrek said in the letter. "Altogether, the insurance industry had to shoulder losses in the order of US$ 37bn for natural catastrophes worldwide in 2010."
When all the data are analyzed, 2010 is expected to be among the three warmest years since the World Meteorological Organization started collecting data in 1850. The mean surface temperatures in the first 10 months of 2010 are the warmest on record.
In its report published yesterday, Munich Re found that the 960 natural disasters that resulted in financial losses in 2010 "far exceeded" the number of disasters in recent years. Last year had the second-highest number of "loss-related natural catastrophes" since the insurance company began keeping track in 1980, and natural disasters racked up $2.5 trillion in losses in the past 30 years. At the top of the heap is Hurricane Katrina in 2005, which racked up $145 billion in losses along the Gulf Coast, about half of which had been insured.
Storms create the 'lion's share' of losses
"The insured losses attributable to all 'great' and 'devastating' natural catastrophes amount to roughly US$ 600bn in total [since 1980]," says the report. "Due to the high worldwide insurance penetration for storms, meteorological events account for the lion's share of this total, with 78%."
As a global insurance company, Munich Re has a big stake in protecting against financial risks associated with natural disasters. It also stands to potentially make some money by selling more insurance policies and increasing rates if risks keep growing because climate mitigation and adaptation measures aren't put in place.
Greenland and eastern Canada contributed disproportionately to rising temperatures in 2010, according to data analyzed by the insurer. Those regions experienced warm-weather anomalies of more than 3 degrees Celsius. North Africa, the Arabian Peninsula and southwest Asia were other hot spots. Turkey and Tunisia, for example, experienced record temperatures.
A transition from El Niño to La Niña conditions also caused some "moderate cooling" on the eastern edge of the Pacific Basin.
In the Arctic, according to the insurance giant, ice cover during September was one-third less than had been recorded in the late 1970s. "Temperatures in the Canadian sector were particularly high, allowing the meltdown to continue unchecked there," says the report. "As a result of the long-term decline in sea ice, the Arctic passages have become more easily navigable, facilitating exploration for and exploitation of the natural resources thought to exist there."
Munich predicted the further expansion of Arctic port facilities along the Canadian and Siberian coasts, and said sea navigation and oil and gas exploration in the rapidly changing Arctic environment could require new types of insurance policies.
"Such catastrophes as the floods in Pakistan or the wildfires in Russia are extreme occurrences within the framework of regional trends which are in all probability attributable to climate change," says the report. "The total monsoon rain which fell in Pakistan in 2010 was the fourth-highest since records were first kept, although its extreme nature was further aggravated by the La Niña phase," it says.