The German reinsurance firm, Munich Re, counts $265 billion in damages for just the first six months of 2011. The previous record holder was 2005 with $220 billion in damages, much of them resulting from the Hurricane Kattrina.
Natural disaster damages for 2011 are five times higher that the past 10 year’s average, and double 2010’s total of $130 billion.
"It is very rare for such an extreme accumulation of natural hazard events to be encountered," Torsten Jeworrek of Munich Re, the world's largest reinsurer, said in press release.
Reinsurance companies are the insurance companies for insurance companies. Reinsurers serve as risk management for insurance companies, so that devastating years like 2011 don’t wipe them out.
But 2011 has been hard on reinsurers. Munich Re reported losses of 948 million euros ($1.45 billion) in the first three months of 2011, according to Deutsche-Welle news.
“The role of insurance in such a case is to bear these seldom catastrophe losses and, by so doing, assist with the rebuilding effort and the economic recovery of the region concerned,” said Jeworrek.
“We were not surprised by any of the events when seen as single events, since they were within the range of what our risk models led us to expect. The accumulation of so many severe events of this type in such a short period is unusual, but is also considered in our scenario calculations,” Jeworrek said.
Economic losses may hurt the pocketbook of insurance companies, but each person’s death diminishes us all, to paraphrase the writer John Donne.
In this respect, 2010 was far worse than 2011. Natural disasters diminished humanity by 19,380 lives in the first six months of 2011, whereas 230,300 perished in 2010.
The Haitian earthquake in January of 2010 accounted for 225,000 of those deaths.
So far this year the worst disaster was the 9.0 magnitude earthquake on March 11 in Japan. At least 15,500 people perished in the quake and subsequent tsunami.
The Japanese quake was also the most costly natural disaster ever recorded at 210 billion dollars.
An earthquake in Christchurch, New Zealand, flooding in Australia and storm and tornado damage in the Southern and Midwestern United States also contributed to the high cost of natural disasters in 2011.
This is a La Nina year, which normally means more intense and frequent storms.
“Overall the accumulation is nothing unusual in La Niña years. The statistical increase in the number of tornadoes over the course of time is mainly the result of better documentation,” said Peter Höppe, head of Munich Re’s Geo Risks Research in a press release.
“One factor that stood out was that this year saw the highest sea temperatures ever measured off the coast of Australia, which are contributors to these weather extremes. Although this is linked to La Niña, temperatures were higher than in previous La Niña years”, said Höppe.
The second half of the year is often costlier that they first, due to the hurricane season, so 2011 may prove to be even more costly and set an even higher record for most costly natural disasters ever.