It's been a relatively light year for natural catastrophe events worldwide, according to recent research released by Munich Re.
There were 490 loss-relevant natural catastrophes in the first half of 2014, the insurer says, yielding $17 billion in insured losses. The average for a similar time period is about $25 billion. Deaths from CAT events are well below averages — Munich Re says 53,000 is the norm while there have only been 2,700 this year.
“Of course, it is good news that natural catastrophes have been relatively mild so far,” Torsten Jeworrek, Munich Re’s Board member responsible for global reinsurance business, says in a statement. “But we should not forget that there has been no change in the overall risk situation. Loss minimization measures must remain at the forefront of our considerations. They make absolute sense from a macroeconomic perspective, as lower subsequent losses mean that they mostly generate savings of several times the investment amount. And they protect human lives.”
Outlier weather events are the most costly to insurers and the population at large. Snowfall of over a meter in some parts of Japan led to heavy losses, attributable in part to the unfamiliarity of the region with snow of that magnitude. In addition, an extended, bitterly cold winter in the U.S. caused extensive damage.
“The harsh winter in the Midwest and on the East Coast once again exposed the vulnerability of infrastructure in the U.S.,” Tony Kuczinski, CEO and President of Munich Re America, added. “Our industry and government must work together to encourage and facilitate greater investment in infrastructure projects that protect communities from loss. Consumers must be informed about the natural catastrophes they are exposed to; what they are or are not insured for; and how to protect their homes and businesses to withstand locally occurring natural hazards.”
And as the calendar flips to the second half of the year, that infrastructure is being put to the test. Tornadoes killed four people and caused heavy property damage in Central New York, particularly the area around Syracuse, last night — an area not accustomed to such activity. The same system also affected Maryland. And last week, twin derechos moved through the Chicago metropolitan area causing heavy lightning and flooding.