Global Topics: Weather Risks

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Weather Risk

When nature becomes a threat

The North American continent is exposed to every type of hazardous weather peril – tropical cyclone, thunderstorm, winter storm, tornado, wildfire, drought and flood. And nowhere in the world is the rising number of natural catastrophes more evident than here. The number of weather-related loss events in North America for the past three decades has nearly quintupled.

 

Like the number of weather catastrophes, the losses they caused in North America is increasing. Even disregarding 2005 (a record year with Hurricanes Katrina, Rita and Wilma), overall and insured losses reveal an upward trend in the past three decades. In 2011, insured property damage due to thunderstorms was the highest on record at an estimated US$ 26bn – more than double the previous US thunderstorm record set in 2010.

 

Anthropogenic climate change is believed to contribute to this trend, though it influences various perils in different ways. Climate change particularly affects formation of heat-waves, droughts, intense precipitation events, and in the long run most probably also tropical cyclone intensity. The view that weather extremes are becoming more frequent and intense in various regions due to global warming is in keeping with current scientific findings, as set out in the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) as well as in the special report on weather extremes and disasters (SREX).

 

Up to now, the increasing losses caused by weather-related natural catastrophes have been primarily driven by socio-economic factors, such as population growth, urban sprawl and increasing wealth. In any case, we believe it is critical for us as risk managers to learn about this risk of change and find improved solutions for adaptation and mitigation. We should prepare for the weather risk changes that lie ahead, particularly in North America.

Expertise

Mark Bove.
Mark C. Bove, CPCU, ARe
GEO Research Specialist
Munich Reinsurance America, Inc.

Touch Natural Hazards (Munich Re Group)

Touch Natural Hazards offers you all-round basic knowledge, analyses, statistics and insurance know-how on all aspects of natural hazards and natural catastrophes.


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