2010: a year of costly disasters

categories (wind speeds over 178 km/h). This means the forecasts of various institutes about the number of storms turned out to be very accurate. “The number of storms was indeed well above average. It is just that it is impossible to forecast whether and where such storms will make landfall”, said Professor Peter Höppe, head of Munich Re’s Geo Risks Research.

Right at the start of the 2010 hurricane season, the water temperatures in the tropical North Atlantic were up to 2°C above the long-term mean — and thus significantly higher than the level to be expected for the cyclical warm phase in the North Atlantic that has persisted since 1995. The water temperatures thus provided ideal conditions for the occurrence and high intensity of hurricanes. As from the beginning of August, atmospheric conditions also favored the occurrence of Atlantic tropical cyclones (“La Niña” conditions).

“That is in line with the trend of the past 30 years, in which all ocean basins show an increase in water temperatures. This long-term trend can no longer be explained by natural climate oscillations alone. No, the probability is that climate change is contributing to some of the warming of the world’s oceans”, said Höppe. “This influence will increase further and, together with the continuing natural warm phase in the North Atlantic, is likely to mean a further high level of hurricane activity in the coming years.”

The strongest storm of the season was “Igor,” which reached wind speeds of up to 250 km/h over the open sea but grazed Bermuda as a weaker hurricane. The most expensive storm was Hurricane Karl, which caused overall losses of $3.9 billion in Mexico, $150 million of which was insured. By contrast, all the storms that arose in the mid tropical Atlantic east of Cuba and the Caribbean islands turned northwards over the ocean.

Asia and America most frequently affected by catastrophes

The global distribution of natural catastrophes in 2010 was comparable to that of previous years. Most catastrophes occurred on the American continent (365) and in Asia (310). 120 natural catastrophes were recorded in Europe, 90 in Africa and 65 in Australia/Oceania. North and South America also accounted for the largest portion of insured losses, namely around two-thirds. Some 17 percent of the losses were incurred in Europe, where the most expensive individual event was Winter Storm Xynthia, which mainly affected Spain and France and caused overall losses of $6.1 billion. As is usual with windstorms in Europe, the share of insured losses was very high, totaling $3.1 billion.

Natural catastrophes in Australia/Oceania gave rise to around 16 percent of global losses. The costliest event was the earthquake which occurred on 4 September in Christchurch, the third-largest city in New Zealand. Overall and insured losses were in the billions here as well. In Australia, there were two severe hailstorm losses, each of which caused overall losses of well over $1 billion in March.

Volcano on Iceland paralyses air traffic

Another, quite different natural hazard event in 2010 demonstrated the vulnerability of the networked global economy: the eruption of the volcano Eyjafjallajökull on Iceland in April. Owing to the dust particles thrown into the atmosphere, air traffic over northern Europe remained virtually paralyzed for days. There was hardly any direct damage, but interruptions in supplies of important goods to industrial firms meant that gradually more and more sectors of the economy were affected. The event ended up costing the airlines billions.

“This volcanic eruption is an example of a case where insurance could have cushioned the effects of a natural hazard event for the economy. In principle, the consequential costs for the airlines would have been insurable. Munich Re sees itself as a pioneer in devising insurance solutions on the boundaries of insurability, including cover for business interruption due to natural hazards”, said Board member Jeworrek.

It is not yet possible to put an exact figure on the extreme floods in northeastern Australia. Since the beginning of December many places have been submerged under water and cut off from the outside world. Many mines have had to stop operations. Heavy rain in this region is nothing unusual and such weather patterns are accentuated by the prevailing “La Niña” conditions.