US Weather Extremes Account for Two-Thirds of Global Losses

by | May 30, 2013

The US was seriously affected by weather extremes last year, accounting for 69 percent of overall losses and 92 percent of insured losses due to natural catastrophes worldwide, according to a Worldwatch Institute report.

Hurricane Sandy, the summer-long drought in the Midwest and severe storms with tornadoes accounted for $100 billion of those global overall losses, the report says. The insurance industry covered $58 billion of the losses. These losses were the second highest overall and insured losses since 1980 in the US.

In 2012, there were 905 natural catastrophes worldwide, 93 percent of which were weather-related disasters. Those disasters caused $170 billion in overall losses and $70 billion in insured losses, according to the report.

Asia endured the most natural catastrophes with 37 percent of the total, followed by the US with 26 percent, Europe with 15 percent, Africa with 11 percent and Australia/Oceania with 6 percent.

While the breakdown is in line with the long-term average from 1980 to 2011, trends show considerable regional differences, the report says. The largest increases over the last 30 years occurred in North America, including Central America and the Caribbean, followed by Asia, and Australia, while the smallest increases happened in Europe and South America.

The US insurance industry expects climate change-related storms and weather occurrences to worsen, but studies and anecdotal evidence from insiders show it’s not doing much to combat global warming or prepare for it.

Earlier this month, Peter Höppe, who heads Geo Risks Research at the reinsurance giant Munich Re, cited studies forecasting a rise in future summer droughts, severe cyclones and increasing risk of storm surge.

Despite the growing risk, Höppe says the US insurance industry has not been engaged in advocacy related to carbon taxes or proposals addressing carbon.

A study released in March by sustainability leadership advocate Ceres found just one-eighth of US insurers surveyed have comprehensive climate change strategies.

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