Losses from natural disasters hit high

A property left devastated in the wake of Hurricane Harvey in Texas last August. The hurricane was the most costly natural disaster of 2017, causing losses of US$85 billion (S$113 billion).
A property left devastated in the wake of Hurricane Harvey in Texas last August. The hurricane was the most costly natural disaster of 2017, causing losses of US$85 billion (S$113 billion).PHOTO: REUTERS

Record $179b set to be paid out by insurers for 2017 after US hurricanes, S. Asia flooding

NEW YORK • Insurers are set to pay out a record US$135 billion (S$179 billion) to cover losses from natural disasters last year, the world's largest reinsurer has said, driven by the costliest hurricane season ever in the United States and widespread flooding in South Asia.

Overall losses, including uninsured damage, came to US$330 billion, said the reinsurer, Munich Re of Germany, on Thursday. That tally was second only to 2011, when an earthquake and tsunami in Japan contributed to losses of US$354 billion at today's dollars.

Insured losses from weather-related disasters were at a high, making up most of the US$135 billion. Munich Re executives warned that losses would continue to escalate.

"Some of the catastrophic events, such as the series of three extremely damaging hurricanes, or the very severe flooding in South Asia after extraordinarily heavy monsoon rains, are giving us a foretaste of what is to come," Munich Re board member Torsten Jeworrek said in a statement.

While it was still difficult to attribute individual weather events to climate change, he said, "our experts expect such extreme weather to occur more often".

The US made up an unusually high share of global insured losses last year - about 50 per cent, compared with just over 30 per cent on average.

Hurricane Harvey, which made landfall in Texas in August, was the most costly natural disaster of 2017, causing losses of US$85 billion. Together with hurricanes Irma and Maria, the 2017 hurricane season caused the most damage ever, with losses reaching US$215 billion.

But that was not all. The devastating wildfire season in California drove insured losses to around US$8 billion. And at least five severe thunderstorms across the US, accompanied by tornadoes and hail, caused insured losses of more than US$1 billion each.

Mr Mark Bove, a senior research meteorologist at Munich Re, said in an interview that losses jumped in the US because so many of the disasters hit highly populated areas: the Houston bay area, South Florida and Puerto Rico. That was a trend he expected to continue.

People are moving to warmer climates, putting them in the path of hurricanes, and more people are affected by California's fires, he said. "And we don't build buildings to withstand the weather we see today, let alone what we might see as the climate changes in the next 10 to 20 years," he said.

In Asia, heavy monsoon rains that lasted about four weeks longer than usual killed 2,700 people and caused US$3.5 billion in total losses. The Terai lowlands in Nepal, home to almost half the Nepalese population, were most severely hit.

In Europe, unusually low temperatures in April caused billions of dollars in damage to farmers, shrinking some harvests by 50 per cent. The damage was especially costly because crops had already grown robustly in an otherwise warm spring.

Similar volatile weather patterns are set to become more frequent as the climate changes, Munich Re said in its news release.

NYTIMES

A version of this article appeared in the print edition of The Straits Times on January 06, 2018, with the headline 'Losses from natural disasters hit high'. Print Edition | Subscribe