Tropical Cyclones Causing Billions in Losses Dominate 2019 Natural Catastrophe Picture

This year’s typhoon season was again, as in 2018, subject to the “El Niño Modoki” effect, a particular phase of natural climate oscillation, which causes variations in water temperatures in the tropical Pacific Ocean. Under these conditions, typhoons steer more frequently towards Japan. All in all, the typhoon season in the northwest Pacific was close to the long-term average in terms of the number of storms.

Ernst Rauch, Chief Climate and Geoscientist at Munich Re, said: “The typhoon season shows that we must consider short-term natural climate variations as well as long-term trends due to climate change. In particular, cyclones are becoming more frequently associated with extreme precipitation, as with Hagibis in Japan in 2019 and Hurricane Harvey in 2017 in the United States. Recognizing these changes can form the basis for further preventive measures to reduce losses.”

Hurricane Dorian: Grazes the U.S., Destruction in the Bahamas
The strongest hurricane of the Atlantic season, Dorian, caused catastrophic damage in the Bahamas. The category 5 hurricane hit the Abaco Islands in the north of the island state on 1 September with wind speeds of about 290 km/h. From there, the storm moved to the neighboring island of Grand Bahama and stalled there for one and a half days while maintaining extreme wind speeds. Buildings, infrastructure, yachts and ships were completely destroyed in many areas.

Originally, it was feared that Dorian would also hit the southeast coast of the US, but a more northerly and easterly track largely spared the U.S. mainland. Dorian caused overall losses of about $5.6 billion, with only a small portion of these losses affecting the US. Insured losses came to about $4 billion.

The number of three major hurricanes (category 3–5) in the Atlantic in 2019 was close to the long-term average (2.7). However, the number of named storms (18) significantly exceeded the average (12). Losses were relatively low, however, as the strongest storms remained over the ocean or missed the US mainland. Overall losses in the United States during the 2019 hurricane season were $3 billion, of which $2 billion were insured.

Due to the lack of severe hurricanes, the US share of global natural catastrophe losses was lower than usual (31 percent of overall global losses compared with the long-term average of 35 percent). The U.S. thunderstorm season brought slightly more tornadoes than the long-term average. A strong snowmelt followed by a series of thunderstorms in March and May triggered severe flooding in the Midwest and other areas along the Mississippi. Overall losses from these events were about $24 billion, with about $14 billion in insured losses.

Wildfires: Slight easing in California, Enormous Fires in Australia
After the record losses of previous years, the wildfire season in California was less severe. A wet winter ameliorated summer drought conditions as compared with recent summers. There were still many fires, but they burned a much smaller area than the five-year average. Several fires threatened cities and millions of people lost electricity for days, as power was shut down as a precaution. Overall losses were $1.1 billion, and about $0.8 billion were insured. Despite the lower losses in 2019, this does not change the sharply rising long-term trend for forest area burned and wildfire losses in the United States.

The bushfire season in Australia has already been very severe. High temperatures and dry air, in combination with a great deal of flammable fuel due to a lack of precipitation during the cooler season, led to a very early start to the bushfire season in September in Queensland, and since affecting New South Wales, Victoria, South Australia, Western Australia and Tasmania. Extreme fires enveloped Sydney in smoke; schools and government offices were temporarily closed. The losses from the fires were substantial, although the flames did not reach Sydney itself. However, the bushfire season is expected to continue during the midsummer months of January and February.

Individual events cannot be directly attributed to climate change. Recent studies have shown, nonetheless, that in the long term the environmental conditions for bushfires have become more favorable – especially in the south and east of Australia.  

Cyclone Idai: Humanitarian Catastrophe in Mozambique
The greatest humanitarian catastrophe of the year was Cyclone Idai, which hit Mozambique and neighboring countries in March. More than 1,000 people died and hundreds of thousands lost everything they had. Idai struck the coastal port of Beira, Mozambique’s second-largest city (500,000 inhabitants). With wind speeds of approximately 170 km/h, the storm wrecked a huge number of mostly simple structures. In addition, the flood wave and heavy precipitation caused widespread flooding stretching into the flat hinterlands, destroying crops. Overall losses came to $2.3 billion. Almost nothing was insured. The losses in Mozambique correspond to about a tenth of its GDP – an enormous impact on a very poor country. Mozambique was hit by another cyclone, Kenneth, just a few weeks later.

These extreme consequences clearly show that, particularly in poor countries, human lives and hard-won economic growth must be better protected. UN organizations, the World Bank, companies (including Munich Re) and other institutions founded the Insurance Development Forum (IDF) in 2016, which supports insurance solutions for developing countries through the G7 “InsuResilience Global Partnership” initiative.

Severe Weather Damage in Europe
A combination of heatwaves and severe hailstorms were the greatest cause of losses in Europe. A long dry period led to crop losses in many countries. In the Munich area, a storm in June brought hailstones the size of golf balls, causing nearly €1 billion ($1 billion) in losses, of which nearly three-quarters was insured. Even more extreme hail damage was caused on the Adriatic in July. Hailstones as large as oranges pelted cars and roofs. Many people were injured. Overall losses from the summer storms in Europe were $2.5 billion (€2.2 billion), with insured losses of about $0.9 billion (€0.8 billion).

Ernst Rauch commented: “Although hailstorms are localized, they can cause extreme damage and can even be life-threatening. Recent scientific studies have shown that we can expect hailstorms to increase in many regions as a consequence of climate change. It is also clear in this case: Measures such as better early-warning systems and more resistant building materials are important in order to mitigate against long-term increases in losses.”