Rising natural catastrophe losses – what is the role of climate change?

Abstract

For more than 30 years Munich Re scientists have been analysing natural hazards throughout the world. Munich Re’s NatCatSERVICE now has records of more than 22,000 single natural events having caused damages. Analyses of these data show very clearly that natural catastrophes have increased dramatically and are causing more and more damage. Inflation-adjusted economic and insured losses from these great natural catastrophes have risen to nearly US$ 180 bn in economic losses and around US$ 90 bn in insured losses in the record year of 2005. As the upward trend in numbers of natural catastrophes is mainly due to weather-related events such as windstorms and floods and is not apparent in the same way for events with geophysical causes such as earthquakes, tsunamis, and volcanic eruptions, there is some justification for assuming that this trend is the result of changes in the atmosphere, most probably global warming. Our analyses of the hurricane frequency in recent decades, taking into account the natural climate cycles (Multidecadal Atlantic Oscillation), indicates that current activity of strong hurricanes (SS 3 to 5) is higher than in any other previous period; this suggests an impact from global warming. Evidence for a significant impact of climate change in several sectors is undoubted. In the economy, climate change is no longer seen exclusively as a financial risk, but it also has been stated as offering a great opportunity.