Thursday, November 1, 2012

Insurance Company Acknowledges Extreme Weather Caused by Climate Change

Extreme weather is costing insurance companies billions of dollars and this is forcing them to accept the veracity of climate change. Even before the mega-storm known as Hurricane Sandy hit in late October 2012, a Huffington Post article indicated that federal disaster declarations have doubled winter storm losses since the 1980s. In 2011, thunderstorms caused over $25 billion in damages in the U.S., more than double the previous record.

As reported by Bloomberg, the total economic loss from the Hurricane could exceed $20 billion, including insured losses of about $7 billion to $8 billion. These costs could subtract 0.1 to 0.2 percentage points from US gross domestic product in the fourth quarter. The industry forecasting firm IHS Global Insight estimates the costs of Sandy could be as high as $50 billion in damages and lost business.

The German reinsurance giant Munich Re, has produced a report called "Severe Weather in North America." According to the report, between 1980 and 2011, the overall losses from weather catastrophes was over $1 trillion in 2011 dollars -- including some $500 billion in insured losses. Hurricane Katrina itself accounted for some $125 billion in losses, according to the Munich Re analysis, and roughly 30,000 people "lost their lives due to weather catastrophes in North America" in the 30 years examined by the report.

"Nowhere in the world is the rising number of natural catastrophes more evident than in North America," the analysis declared. "The study shows a nearly quintupled number of weather-related loss events in North America for the past three decades, compared with an increase factor of 4 in Asia, 2.5 in Africa, 2 in Europe and 1.5 in South America."

In a statement accompanying the report's release, the Head of Munich Re’s Geo Risks Research unit, Peter Höppe, said, "In all likelihood, we have to regard this finding as an initial climate-change footprint in our U.S. loss data from the last four decades. Previously, there had not been such a strong chain of evidence.

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