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climate change > newsfile > climate-related insurance losses soar in 2005

Climate-related insurance losses soar in 2005

Posted: 06 Dec 2005

This year (2005) has witnessed the largest financial losses
ever as a result of weather-related natural disasters an international climate change conference was told today.

Preliminary estimates presented by the Munich Re Foundation, part of one of the world’s leading re-insurance companies, put the economic losses at more than US$200 billion with insured losses running at more than US$70 billion.

This compares with 2004, the previous most costly year as a result of weather-linked disasters. Here economic losses totalled around US$145 billion and the insured losses reached some US$45 billion.

This year’s figures, partly as a result of the highest number of hurricanes or tropical storms ever seen since records began in 1850, are part of a climbing trend being linked by many in the industry with climate change as a result of human-made emissions.

Tropical storms

Insurance industry experts also point to growing scientific evidence including studies, reported in the journal Nature this year, that indicate that major tropical storms in the Atlantic and Pacific have increased in
duration and intensity by about 50 per cent since the 1970s.

By 1 December, 2005, there had been 26 tropical storms, five more than the previous record of 21. Fourteen of these storms were classed as hurricanes.

The year was also marked by the highest rainfall ever recorded in India in Mumbai; the first ever hurricane to emerge that approached Europe and the appearance of the strongest hurricane on record.

Thomas Loster, chief executive of the Foundation and a member of the Finance Initiative of the UN Environment Programme (UNEP), said: “There is a powerful indication from these figures that we are moving from predictions of the likely impacts of climate change to proof that it
is already fully underway”.

“Above all these are humanitarian tragedies and show us that, as a result of our impacts on the climate, we are making people and communities
everywhere more vulnerable to weather-related natural disasters,” he said.

Mr. Loster, a climate expert whose parent company has arguably the best economic and insurance data on natural disasters anywhere, said that economic losses related to atmospheric-linked disasters showed a far stronger trend than those related to earthquakes for the years 1950 to 2004.

“We do not want to underestimate the human tragedy of earthquakes like the recent one in Pakistan which can kill tens of thousands of people a year. But our findings indicate that it is the toll of weather-related disasters that are the ones on the rise,” he added.

Clear signal

Klaus Toepfer, UNEP’s Executive Director, added: “We are here in Montreal for the 11th Conference of the Parties to the climate change convention. It is vital that, before this meeting ends, governments send a clear signal to
business, industry and the people of the world that they are determined to continue the battle to curb global warming”.

Scientists estimate that greenhouse gas must be reduced by 60 per cent or more in order to stabilise the atmosphere.

“We must find the political will and the funds necessary to help the most vulnerable people on the planet adapt to the climate change that is now underway. But in the end the best form of adaptation is to reduce the world’s emissions by embracing a revolution in the way we use rather than abuse energy and by dramatically boosting energy efficiency and using technologies and techniques already available or at our finger tips,” he said.

Source: UNEP

Related links:

Stormy path to a warmer world

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