Munich. According to Munich Re's data, there
were around ten loss-producing droughts around the world each year
in the early eighties, but the number in recent years has been
about twice as high, as is stated in Munich Re's new publication
Topics Geo 2012. “The Intergovernmental
Panel on Climate Change (IPCC) expects heatwaves and droughts to
increase in many regions of the world over the coming decades, in
the course of which droughts will become one of the most
destructive natural catastrophes”, says
Prof. Peter Höppe, Head of Geo Risks
Research at Munich Re.
In 2012, the corn belt in the US Midwest was hit by a drought such
as occurs only about once every 40 years. It was triggered by
record temperatures following a dry, overly warm winter. The
resultant agricultural losses amounted to around US$ 20bn, of which
about US$ 15bn were insured.
“The US agricultural insurance system is
based on dividing the risks between the state and the insurance
industry and in this case proved its worth. It will enable farmers
to return to productivity quickly and avert bankruptcies of farmers
and even agricultural banks. In view of the mounting drought risks
confronting other countries, such an exemplary risk management
system takes on great significance”, says
Torsten Jeworrek, member of Munich Re's Board of Management.
In recent years, droughts in Texas and Russia have also
drastically reduced crop yields. A drought in Somalia in 2011
triggered a nationwide famine.
All in all, about 900 natural catastrophes occurred in 2012,
causing economic losses of US$ 170bn according to the most recent
data. Of those losses, about US$ 70bn were insured. The losses were
slightly higher than the ten-year average, but significantly lower
than those in the record year 2011, which was dominated by the
earthquake in Japan. With around 90% of worldwide natural
catastrophe losses, America was hit far harder than is otherwise
the case (usually about 70%).