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    • Shortly before the end of the year, the strongest earthquake for 40 years

    • Human tragedy with tens of thousands of people killed or injured by earthquake and seismic sea waves (tsunamis) 

    • Limited claims burden for Munich Re Group, the latest information suggesting a figure below €100m

    • Even before the seaquake, 2004 was already the costliest natural disaster year ever for the insurance industry, with losses of US$ 40bn 

    • The cyclones in the United States, the Caribbean, and Japan alone generated insured losses exceeding US$ 35bn

    • Weather extremes as a result of global warming

    • Peter Höppe new head of Munich Re's Geo Risks Research Department


    On 26 December 2004, an extremely strong seaquake hit the north of Sumatra and triggered seismic sea waves that surged with great force against sections of coast a great distance away. Tens of thousands were killed or injured, millions were made homeless. The insurance penetration is relatively low, and the insured property losses are likely to be limited due to the sparse concentrations of values. It is too early for a substantiated loss estimate. Judging by the information it has received so far, the Munich Re Group expects its own burden to be limited, with a figure currently under €100m. This means that at present there is no reason to adjust the result forecast for the current business year (profit target: €1.8–2bn).

    Overall picture of natural catastrophes in 2004

    Over the past 30 years Munich Re has been documenting and analysing all reports on natural hazard events with large material or human losses throughout the world, which this time occurred mainly in the second half of the year. The third quarter was marked by extreme weather-related natural catastrophes, with hurricanes in the Atlantic and typhoons in the West Pacific generating record losses.

    Stefan Heyd, member of Munich Re's Board of Management: We are shocked at the scale of human tragedy in southern Asia. Many thousands of people have died, as in the devastating earthquake that hit Bam (Iran) exactly one year ago to the day. The terrible effects spreading all around the Indian Ocean and reaching as far as the Horn of Africa are a further reminder of the global threat from natural catastrophes. Heyd, whose responsibilities on the Board include corporate underwriting, commented on the weather extremes of 2004 as follows: "They underline our long-standing demand for prompt and rigorous measures against global climate change. After the disappointing outcome of the recent climate summit in Buenos Aires, time is running out. We will continue to provide cover for losses from natural catastrophes if the price is commensurate with the risk that is highly exposed due to weather-related phenomena and concentrations of values. The unprecedented claims burden from natural catastrophes has contributed to risk awareness and appreciation for insurance protection growing again. It has also led to the prices for these covers remaining stable in the renewal season that is now coming to an end."

    An overview of the analysis results for 2004

    • Insured losses rose to over US$ 40bn (previous year: US$ 15bn), more than US$ 35bn of which was due to devastating hurricanes and typhoons. Even before the latest earthquake, 2004 had thus become the costliest natural catastrophe year so far in insurance history (the second most expensive year was 1992, with insured losses at that time of US$ 26bn – dominated by Hurricane Andrew).
    • Economic losses were double the previous year's figure and topped US$ 130bn. At this point in time, we cannot give an exact figure for the losses from the seaquake on 26 December. The earthquake in the northwest of Japan (Niigata) on 27 October accounted for roughly US$ 30bn, where the bulk of the destruction involved infrastructure installations which were not insured. A higher overall figure for economic losses had only ever been recorded in 1995, when losses came to US$ 172bn (owing to the Kobe earthquake). The average for the last ten years is now US$ 70bn.
    • With some 650 loss events, the number of documented natural catastrophes was in line with the average of the last ten years. The number of events consequently says little about the losses to the economy and the insurance industry.
    • Even before the recent seaquake, natural catastrophes had already claimed over 15,000 fatalities this year. The Caribbean was hit by two severe catastrophes. In May, flash floods and flooding claimed over 2,000 lives in Haiti and the Dominican Republic. In September, the two countries were devastated by Hurricane Jeanne, with again almost 2,000 victims. On 24 February, 640 people were killed by an earthquake that rocked the north of Morocco. The number of fatalities in the year 2004 as a whole is certain to change drastically. According to current media reports, the seaquake claimed the lives of up to 45,000 people.

    Tens of thousands killed or injured after seaquake in Asia /
    The number of earthquakes had been below average in the course of the year until then

    Of the 650 events analysed by Munich Re, about 80 were due to geological hazards (70 damaging earthquakes and 10 volcanic eruptions). On 26 December a seaquake with a strength of 9.0 on the Richter Scale and subsequent tsunamis caused substantial damage, with tens of thousands of people killed or injured. The worst affected areas were stretches of coast in India, Indonesia, Sri Lanka, and Thailand, where the floods hit the sometimes densely populated coastal strips and a number of tourist centres. Losses have also been reported from Malaysia, Bangladesh, Myanmar, and the Maldives – and even from the Horn of Africa. In spite of the long coastlines affected, the burden on the insurance industry will be limited. The reason for this is that seismic flood waves do not usually reach much further than a few hundred metres inland, so that although the destruction there is great it is hardly comparable with the widespread devastation caused by severe storms. Also, the concentrations of values and the insurance penetration in the areas affected were generally low and only higher in places with infrastructure for tourism or harbour facilities. What is more, in the majority of these countries the earthquake risk (including tsunamis) is excluded in property insurance policies, and additional covers – as well as life and health insurance – are quite unusual.

    Besides the event on 26 December and its numerous aftershocks, there were a number of other earthquakes in 2004, some of them strong. 640 fatalities were caused by an earthquake in the north of Morocco on 24 February. The Niigata quake (Japan) with a strength of 6.6 on the Richter Scale is the third most expensive earthquake of all time so far – after the earthquakes of Kobe in 1995 (economic losses: US$ 100bn) and Northridge (US$ 44bn). It claimed the lives of 40 people and generated economic losses of around US$ 30bn, including insured losses of US$ 450m. A large seaquake with a strength of over 8 also occurred near the Antarctic a few days before 26 December, but it had no damaging effect.

    2004: Maximum losses for insurers – mainly due to weather-related natural catastrophes

    About half of the approx. 650 natural catastrophes recorded in 2004 were windstorms and severe weather events. But these weather-related natural catastrophes accounted for more than 90% of the year's insured losses. "This again confirms the assumption we have been expressing for a long time that climate change – with a high degree of certainty triggered by human activity – will lead to an increase in the frequency and intensity of exceptional weather events", to quote Dr. Gerhard Berz, the now retiring Head of Geo Risks Research at Munich Re.

    The hurricane season in the Atlantic and the typhoon season in the Pacific were completely exceptional, in terms of both the extent of damage and the meteorological facts:

    • The hurricane that formed off the Brazilian coast at the end of March was the first ever recorded there and caused severe damage to buildings in the federal state of Santa Catarina. The region was classified as hurricane-free because the water temperatures in the South Atlantic were hitherto too low.
    • Hurricanes Charley, Frances, Ivan, and Jeanne seriously affected numerous island states on their way across the Caribbean, where they generated economic losses of over US$ 7bn, of which approx. US$ 2.5bn was insured. Florida was hit by all four of these severe storms within the space of just a few weeks, so that the insurance industry suffered record losses. With economic losses of almost US$ 60bn and insured losses exceeding US$ 28bn (Atlantic), the 2004 hurricane season was the most costly of all time so far (for the sake of comparison, the 1992 hurricane season gave rise to economic losses of US$ 30bn and insured losses of US$ 18bn, mainly the result of Hurricane Andrew).
    • Between June and October 2004, Japan was hit by a total of ten tropical cyclones – more than in any other year since the commencement of continuous weather recordings over 50 years ago. Typhoons Chaba, Songda, and Tokage caused economic losses exceeding a total of US$ 10bn: more than half of this amount is being carried by the insurance industry. Further information on the windstorm series in the Atlantic and Pacific may be found in the attachment.
    • At the end of November, when the typhoon season was nearing its close, Tropical Storm Winnie unleashed torrential rain over the Philippines. More than 750 people were killed in the floods and landslides.

    Europe was largely been spared extreme winter storms and thunderstorms in 2004. Although a few minor tornadoes caused a stir in Germany, France, Italy, and the United Kingdom, they caused little damage.

    In May, a squall line passed over the US Midwest bringing severe hailstorms and some 85 tornadoes. It generated more than US$ 800m in insured losses and over US$ 1bn in economic losses.

    Munich Re's Geo Risks Research Department "under new management" from 1 January 2005

    For 30 years now, Dr. Gerhard Berz and the Geo Risk Research team at Munich Re have been documenting and analysing natural hazards and the effects of climate change throughout the world. In so doing, they create the underlying scientific knowledge for the company's underwriters and Munich Re's clients. The Master of Disaster, as Berz is sometimes called in the media, has made his research work and results available in numerous publications and presentations. In important scientific and political committees and at many events, he has always drawn attention with urgency to the causal connection between increasing natural catastrophes and anthropogenic climate change: "We are at the beginning of a global process of climate change which will develop into a serious danger for future generations if we do not adopt radical measures soon at political, social, and economic levels. The insurance industry can supply vital arguments and incentives."

    At the end of 2004, Gerhard Berz will go into retirement. His successor is Professor Peter Höppe: We will rigorously develop the know-how that is already in place and our innovative tools for analysis and forecasting. Our objective must be to maintain our leading role on all questions dealing with natural hazard risk management and climate research for the insurance industry. And we want to continue to be a competent partner to our clients also in the fields of environmental protection and sustainability. With his specialist knowledge of the impact of the weather and the climate on humans, biometeorologist Höppe further enhances the spectrum of the geo team's work and has also been appointed Munich Re's Environmental Protection Officer. Höppe was introduced to a wider public on 29 September at a press conference on the windstorm series in the Atlantic and the Pacific.

    From the beginning of the new year, all those interested will for the first time be able to access Munich Re's broad scope of geo knowledge at In addition to background information on climate change and the insurance of natural hazards, users will find analyses of topical loss events and interactive hazard maps for all regions of the world.

    Münchener Rückversicherungs-Gesellschaft
    signed Heyd           signed Küppers

    This media information contains forward-looking statements that are based on current assumptions and forecasts of the management of Munich Re. Known and unknown risks, uncertainties and other factors could lead to material differences between the forward-looking statements given here and the actual development, in particular the results, financial situation and performance of our Company. The Company assumes no liability to update these forward-looking statements or to conform them to future events or developments.