Maybe they should just increase premiums.
Natural disasters struck the globe at a violent pace last year that reflects a rapid rise of damaging weather events like thunderstorms, floods and wildfires over the past 30 years.
There were 820 major disasters in 2011, including a parade of springtime storms in the United States that unleashed nearly 1,900 tornadoes, barrages of pelting hail and flood-feeding rainfall.
Last year’s 69 major thunderstorms killed 617 Americans and caused $47 billion in damages, nearly $25 billion of which was insured. That shattered the previous record for insured losses by about $12 billion. It was set in 2010.
The string of thunderstorms underscores a climbing incidence of meteorological catastrophes in the past three decades. Insurers could count on losing about $2 billion from storm damage in the early 1980s. Now the annual average loss is above $10 billion, according to the giant reinsurer Munich Re.
Last year was much worse. Damage from the inland storms amounted altogether to the fourth-largest disaster in U.S. history, barely trailing insured losses from the 9/11 terrorist attacks and Hurricane Andrew in 1992, which inflicted $25 billion in damage. Hurricane Katrina remains the most expensive disaster, at $48 billion.
“That gives you a sense of how extraordinary this spring’s storms and tornadoes were,” said Robert Hartwig, president of the Insurance Information Institute. “There was nowhere to run and nowhere to hide in some sense, at least if you were an insurer operating east of the Rocky Mountains.”
And of course, the insurers blame climate change:
There’s debate among insurers about the impact that climate change is having on the intensification of disasters. Everyone agrees that the blooming wealth in many Asian nations and the rapid rise of population centers along U.S. coastlines are driving up the damage. There are more targets to be ruined.
But Ernst Rauch, who heads Munich Re’s Corporate Climate Centre, believes the rise in disasters can’t be explained entirely by the emergence of more development and higher property values. If that were the case, he said yesterday, then the frequency of earthquakes would be climbing at a clip similar to the rise of climate-connected events like thunderstorms, hurricanes, flooding and fires.
But it hasn’t. Earthquakes have remained mostly steady over the past 30 years, even as winter storm damage in the United States has doubled, thunderstorm losses have jumped fivefold, and the number of acres burned by wildfires has steadily risen, according to Munich Re.
“What we can see is that with the geophysical events [quakes] … we hardly do see any trend or any increase,” Rauch said. “It’s entirely different when you look at weather-related disasters, where we do see this increase.”
“Our interpretation of this increase is that at least part of this increasing frequency and number of weather-related natural disasters is driven by climate change,” he said. “However, we cannot quantify this.”