Reinsurer Munich Re says that their natural catastrophe database (NatCatSERVICE) shows that the Asia Pacific region is increasingly exposed to major weather-related catastrophe events. Their database shows that weather-related catastrophes have more than tripled in the last 30 years, with China seeing weather disasters quadrupling since 1980.
The recent flooding in Thailand, which is still ongoing and losses resulting from it are mounting, is the highest ever loss event for the country (a recent estimate suggested as much as a $13 billion insured loss). Munich Re says this is just the latest example of rising catastrophes and losses in Asia Pacific. Growth in population, continuing urbanisation and increasing wealth will cause the losses from these weather disasters in Asia Pacific to keep increasing over the coming years. Increasing insurance penetration is another factor, over the last 30 years only 6% on average of the losses were insured but that is likely to grow rapidly in the coming decade.
Over 2011 to date around 80% of all economic losses from natural events around the world have come from Asia Pacific, amounting to $259 billion in economic losses around $52 billion of which was insured. Globally, economic losses from natural events and disasters amounted to $310 billion around $80 billion of which will be covered by the re/insurance industry.
Munich Re says that these figures show that Asia Pacific urgently needs wider natural catastrophe and weather risk coverage. This can be met by insurance, reinsurance, public-private risk transfer partnerships, pooling of risks and also alternative techniques such as catastrophe bonds, parametric products and weather risk management tools.
“Such public-private partnership solutions can provide durable economic stability to societies and government budgets by offering significant financial relief when disaster hits, immediate liquidity to governments and citizens, assistance in balancing government budgets and help with risk prevention and post-disaster management”, commented Ludger Arnoldussen, member of Munich Re’s Board of Management.
Munich Re have published some graphs and data visualisations from their database showing the growing trend for disaster losses with particular focus on Asia Pacific. According to their data, 2011 has seen the highest worldwide economic losses from these events and the second highest insured losses on record.