Overall economic losses caused by natural disasters are increasing worldwide. In order to assess these trends and the associated risks properly, it is crucial to examine the scientific nature of the phenomena. The hazards are usually divided into the following four classes: geophysical, meteorological, hydrological and climatological.
Every year, 50 to 65 volcanoes erupt worldwide. The two severe earthquakes and numerous volcanic eruptions in 2010 made clear the enormity of the danger and loss potential posed by geophysical events. Earthquakes have the potential to cause mammoth economic losses, because their intensity can be very high across relatively large areas. Ground subsidence causes problems in many countries as well. In France and the south of England, where the risk is insured, this issue is particularly relevant for the insurance industry.
Winter storms Daria, Lothar, and Kyrill in Europe, Typhoon Mireille in Japan, Hurricanes Andrew and Katrina in the United States: these are just a few of the major windstorm catastrophes of recent years that have devastated entire regions, destroyed forests and coastal resorts, and cost billions of euros. Storms such as tropical cyclones, winter storms, thunderstorms, tornadoes or hail cause millions in damage every year, and thus are extremely significant for the insurance industry.
After windstorms, floods are the most frequent cause of natural hazard losses. Worldwide, about a third of all reported events and a third of the overall losses resulting from natural catastrophes are attributable to floods. While media interest tends to focus on storm surges and river floods, the risk of flash floods and other water damage after heavy rain is generally underestimated.
Forest fires primarily occur after prolonged dry spells. Dry vegetation can become easily ignited, starting a wildfire that will quickly spread out of control if winds are strong. There is still no single accepted definition of a heatwave today, even though it is clear that the phenomenon consists of two main elements: unusually high air temperature, lasting for several days. The concept of drought or dry weather has also not been distinctly defined. As it is generally understood, a drought is relative and means that the availability of water in a given region is lower than the long-term average, and has been for a certain period.
Due to rapidly rising living standards, excessive urbanisation and the consequences of climate change, some emerging countries are particularly affected. Current studies have concluded that insurance protection in these countries can make an important contribution to speeding up economic recovery after natural catastrophes. Apart from the climate aspects, urban sprawl is another key factor in rising loss potentials. People are increasingly setting up home on city boundaries, between the suburbs and nearby woodlands.