Study shows influence of climate oscillation on Typhoon losses in Asia

Typhoon losses in East and Southeast Asia are influenced by a climate oscillation that alternately leads to periods of approximately ten years with fewer or more windstorms. Following a phase with a lower number of tropical cyclones in the Northwest Pacific Basin, we are now approaching a phase in that vacillation that is expected to again exhibit greater storm activity.

Munich. This is the conclusion that can be drawn from a study by Munich Re and the German Aerospace Center (DLR), which has been published in the scientific journal “Natural Hazards and Earth System Sciences” (http://www.nat-hazards-earth-syst-sci.net/recent_papers.html). Eberhard Faust, who is in charge of research in this area in Munich Re's Geo Risks Research unit: “Observations in the western North Pacific going back several decades show a multi-year climate vacillation reflected in phases of different storm activity over the ocean and at landfall, and thus different loss levels. What the underlying causes are, how this fluctuation is impacted by anthropogenic climate change and what changes are to be expected as a result are yet to be investigated. However, the effect this oscillation has been shown to have on typhoon losses is particularly relevant in the field of risk management.”

Board member Ludger Arnoldussen said:
“These findings will be incorporated into Munich Re's internal risk models and accumulation control. The expectation that a phase of increased typhoon activity may be on its way in particular underlines the need for loss prevention measures. In any case, it makes economic sense to ensure buildings and infrastructure are better protected against nat cat losses. I am thinking here in particular of the rapidly increasing values in the conurbations of Southeast Asia and in eastern China's fast-growing megacities. In the case of countries where the insurance density is too low, joint initiatives by the state and the insurance industry would also be an effective means of offering the population more insurance cover.”

The authors of the study, Christoph Welker (formerly of the German Aerospace Center and now at the University of Bern) and Eberhard Faust (Munich Re) analysed typhoon activity in the western North Pacific together with normalised economic loss data from Munich Re's NatCatService database for the period from 1980 to 2008. During phases of increased storm activity, the mean normalised annual loss was found to be 46% above the average, and in years of lower activity, 29% below it. The number of loss events was 14% above the average during the active phase and 9% below the average in less active years.