Reinsurers have benefited from a favorable loss year but smaller and more frequent weather events are chipping away at the industry’s capital base.
Severe weather events accounted for 45 percent of global insured losses with three U.S. events alone causing insured losses of over $1 billion each, said a statement from Munich Re.
According to a report from Munich Re’s NatCatSERVICE, only one named storm (Winter Storm Klaus) ranked in the top five largest natural catastrophes of 2009 in terms of overall and insured losses. The remaining losses are comprised of multiple tornados, earthquakes, hailstorms and severe thunderstorms scattered in Europe and the U.S.
Losses from frequent severe storms is becoming as crucial issue in the U.S., where Munich Re says that losses from frequent severe events has skyrocketed from an average of $4 billion per year to $10 billion a year over the past three decades.
The reinsurer blames climate change for the changes in storm frequency and adds that losses will only increase unless action is taken to reduce greenhouse gas emissions.
“We need as soon as possible an agreement that significantly reduces greenhouse gas emissions because the climate reacts slowly and what we fail to do now will have a bearing for decades to come,” said Torsten Jeworrek, Munich Re Board member responsible for global reinsurance business.
Despite the gloomy long term forecast, Munich Re adds that 2009 was a relatively light year for natural catastrophes. The report said that insured losses for the past year were $22 billion compared with insured losses of $50 billion in 2008.
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