Greenhouse Effects on Natural Catastrophes and Insurance

INCREASE OF CATASTROPHE FREQUENCY AND SEVERITYIn the last couple of decades the frequency of natural catastrophes has increased dramatically. This realization results from the statistical analysis of the comprehensive loss data that we have been collecting constantly over the last 30 years and have evaluated in connec-tion with the preparation of our "World Map of Natural Hazards", which is now in its second edition (Munich Re, 1988). Each month brings data on between 30 and 50 new loss events. Fortunately, however, only a few of these have to be added to the list of major natural catastrophes, that is only those involv-ing damage that considerably exceeds what the country or region concerned can handle itself so that substantial na-tional or international aid is required. That is generally the case if the number of dead runs into the hundreds or thousands, if tens or hundreds of thousands of people are rendered home-less and if the total economic loss is in the region of US$ 100 million. These major catastrophes, about which we have fairly comprehensive data even in the case of those that occurred farther back in the past, numbered only 14 in the 1960s but 70 in the 1980s; they there-fore increased over a period of 30 years by a factor of 5. The trend is also very clear when we consider the total economic loss, which - adjusted for in-flation - increased during the same period from an average of US$ 3.7 bil-lion per year to US$ 11.4 billion, i.e. by a factor of 3.1. The insured losses, finally, increased by as much as a fac-tor of 4.8.