Overall losses from natural disasters increased significantly in 2016. At US$ 175bn, they were at their highest level for four years. Against this background, the latest issue of Topics Geo magazine takes a detailed look at the subject of resilience: how losses can be prevented and reduced, and how the consequences of disasters can be overcome as quickly as possible.
“By carrying a portion of the losses, insurance can play a key role in ensuring that people, and even entire countries, can get back on their feet faster after a natural disaster,” says Munich Re Board member Torsten Jeworrek. Several economic studies in the last few years have shown that high insurance penetration assists a country’s economy after a major natural disaster. The greater the proportion of insured losses, the less of a decline there will be on average in economic output following a natural disaster, and therefore the faster the country can recover.
Increasing resilience involves reducing risks, for example by restricting development along coastlines or in exposed regions along waterways. Reducing the loss susceptibility of buildings, and installing protection measures such as dykes, contributes to resilience just as much as early warning systems and evacuations. Following a disaster, the focus must then be on effective disaster aid and reconstruction.
In summary, poorer countries are generally less resilient, or less resistant than developed countries, a fact that is illustrated by the example of two severe earthquakes: Haiti and Chile were both struck by extremely powerful earthquakes in early 2010. In Chile, 520 people died, whereas the death toll in Haiti was around 159,000. Despite the disaster, the economy in Chile grew in the same year by 1.3%. In Haiti, it contracted by 5.5%. So the contribution that insurance can make to increasing resilience is much greater in emerging and developing countries that have traditionally had low insurance penetration than it is in industrialised countries.
An overview of natural catastrophe figures for 2016: With total losses of US$ 175bn, 2016 was one of the ten costliest years since 1980, after adjusting losses for inflation. The proportion of losses in the USA and Asia, which together accounted for 84% of the total loss amount, was extremely high. Munich Re categorised 750 natural disasters as relevant and included them in the event statistics. The number was significantly higher than the average for both the last ten years (590) and the last 30 years (470).
As well as looking at the subject of resilience, the latest issue of Topics Geo includes in-depth analysis of the main natural disasters over the course of the last year. There are also articles on climate change, and on the current state of research into its influence on the probability of individual weather events occurring.
Source: Munich Re
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