WORLD INSURANCE NEWS

NATURAL CATASTROPHES 1999

A year of major earthquakes, weather-related natural catastrophes were to blame for the gigantic global economic losses with total casualties reaching a high of 75,000. So reported Munich Re in "Topics: Annual Review of Natural Catastrophes 1999".

Insured losses went beyond US$ 22bn, the second highest figure recorded in the 1990s (1992: US$ 26bn due to Hurricane Andrew).

The three December gales in Western and Central Europe (Anatol, Lothar and Martin) that generated losses amounting to about US$ 6bn, lead the field, followed by Typhoon Bart (Japan, September: US$ 3bn), Hurricane Floyd (United States, September: US$2.2bn), and a series of tornadoes in the United States (Oklahoma, May: US$ 1.5bn). The major earthquakes in Turkey (US$ 600m) and Taiwan (US$ 850m) badly affected industrial areas resulting in large insurance losses.

Economic losses totalled approximately US$ 100bn, a figure only exceeded by the losses incurred in connection with the Kobe earthquake in 1995. The two earthquakes (Turkey: US$ 12bn, Taiwan: US$ 14bn) and the floods in Venezuela (US$ 15bn) were reportedly the principle causes. Together, Lothar and Martin cost around US$ 11bn.

Last year, Munich Re registered 755 major loss events caused by natural hazards. This is 25.8% above the long-term average of 600.

The acute increase in natural catastrophes represents a major challenge to the insurance industry, which is developing new tools in an endeavour to come to terms with the threatening loss potentials. One of these tools, alternative risk transfer (ART) has already assumed an important position in the provision of additional insurance capacity.

Source: Natural Catastrophes 1999, Topics: Annual Review of Natural Catastrophes 1999, Munich Re