climate change > newsfile > insurers warn of mounting cost of climate change
Insurers warn of mounting cost of climate changePosted: 30 Oct 2002
Natural catastrophes, the vast majority of which have been weather-related, have cost countries and communities an estimated $56 billion during the period January to September 2002 and the final bill for this year's natural disasters could be over $70 billion. This warning from insurers coincides with the latest round of UN discussions on climate change in Dehli, India.
Meanwhile insured losses are running at an estimated $9 billion over the same period. For example the August floods in Europe, the worst in 150 years, flooded buildings, swept away cars, damaged railway, power and communications lines and killed more than 100 people. Insured losses from these events are to date estimated at between $2 and $5 billion.
The findings come from experts at Munich Re, the re-insurance company and a member of the United Nations Environment Programme's (UNEP) Finance Initiative. The company has since the 1970s been compiling annual records on natural catastrophes and their costs.
Thomas Loster, a member of the team, said: "There have been over 500 major natural disasters already this year, killing thousands of people, making hundreds of thousands homeless and affecting millions. Many of the atmospheric events we have recorded were extreme".
"Rain intensities reached unique values, marking all-time records in the statistics of the meteorologists and climate scientists. There have been, for example, the floods in Chile, Jamaica, Nepal, Spain and France and the summer floods in Germany where annual precipitation averages were reached in the course of only one or two days. We have, once more, strong indications that global warming is increasing and will thus have serious affects on societies and economies alike," he said.
Typhoon Rusa, which hit Korea in late August and early September, disrupted 24,000 power lines, destroyed 645 ships, resulted in deaths of 300,000 livestock and cost $6.6 billion, is one of the many weather-related disasters cited in the report.
The Munich Re report, part of its Topics series, says there have been an estimated 526 significant natural disasters in the first nine months of 2002 with the highest in Asia, 195; followed by the Americas, 149; Europe, 99; Australasia, 45 and Africa, 38.
Over 9,400 people have been killed as a result, with the vast majority, over 8,000, in Asia. Europe's economic losses for the first nine months of the year from natural disasters are so far estimated to be almost $33 billion followed by Asia, $14.8 billion and North America, $7.7 billion.
The report underscores the high level of rain-related natural catastrophes. One third of them were floods. In total, there were more windstorm-related natural disasters. But floods killed more people and cost far more than windstorms, earthquakes or other natural catastrophes.
The report estimates that 42 per cent of fatalities; 66 per cent of the economic losses and 64 per cent of insured losses were due to floods.
Windstorms, including hurricanes and tornadoes, accounted for 13 per cent of fatalities; 23 per cent of economic losses and 34 per cent of insured losses.
"Climate change, linked with human-made emissions, is already under way. The world is facing a rise in extreme, weather, events of the kind witnessed in 2002 that will impact on every facet of life including agriculture, health, water supplies and wildlife. It will be the poorer parts of the world, the poorer people, who will suffer most because they have neither the financial or other resources to cope," said Klaus Toepfer, UNEP's Executive Director.
Meanwhile, Friends of the earth warn that global warming will lead to more violent and more frequent storms. Rich countries face more expensive insurance and property in high-risk areas may become uninsurable, while people in poor countries could face starvation.
Sources: UNEP and Friends of the Earth-UK.
For more information and/or a copy of the report, please contact: Eric Falt, Spokesperson/Director of UNEP's Division of Communications and Public Information, email: or Nick Nuttall, email:
Climate insurance to top 300 billion dollars
Vital Climate Graphics Africa