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1998 a Disaster For Insurers, Leading Firms Say 1998 was a year of exceptional natural disasters and the second highest total damages on records, more than triple those of 1997. By Steven Silber, Reuters Start Date: 12/29/98 1998 a disaster for insurers, leading firm says By Steven Silber FRANKFURT, Germany (Reuters) -- Natural disasters caused 50,000 deaths and damages costing more than $90 billion in 1998 -- the second highest figure ever, the world's largest reinsurers said Tuesday. In a statement, Munich Re said this compared with 13,000 deaths and damages of $30 billion in 1997. Thanks to a combination of global warming and unusually heavy rain, 1998 was "a year with an exceptionally large number of natural catastrophes ... (which) claimed the lives of about 50,000 people throughout the world," it said. It said the 1998 damage figure was exceeded only by 1995's $180 billion, much of which was caused by the Kobe earthquake in Japan. Munich Re said that compared with the 1960s, the past 10 years had seen three times as many severe natural disasters that cost the world's economies -- after adjusting for inflation -- nine times as much and the insurance industry 15 times as much. Reasons for this included the growing concentration of population and valuable property in large cities often located in high-risk zones, it said. The increase in tropical cyclones, heat waves, forest fires and ice storms could only in part be explained by natural climate fluctuations of the El Nino and La Nina weather patterns, according to the company. La Nina is a natural climate change associated with colder water temperatures in the Pacific Ocean around the equator. It normally follows its more famous sibling El Nino, which is associated with a warming of Pacific waters. "A key role may also have been played by the fact that in terms of the mean global temperature, 1998 was by far the warmest year since measurements were first taken worldwide around 150 years ago," the statement said. The year saw severe floods and cyclones such as Hurricane Georges in the Caribbean and the Gulf of Mexico, which, with its insured losses of $3.3 billion, was the third most expensive in U.S. insurance history and the largest insurance loss of the year, Munich Re said. Its successor, Hurricane Mitch, killed an estimated 11,000 people in Central America, most of them in Nicaragua and Honduras. Munich Re said warmer winters were causing more frequent and severe storms and this long-term trend was continuing. "A further advance in man-made climate change will almost inevitably bring us increasingly extreme natural events and consequently increasingly large catastrophe losses," the firm's head of geoscience research, Gerhard Berz, said in the statement. "The progress achieved at the fourth climate summit in Buenos Aires at the beginning of November is not enough to halt global warming and stabilize the world's climate in the long term," he said. Munich Re itself registered more than 700 large-loss events in 1998 compared with between 530 and 600 annually in recent years, with most being caused by wind and flooding. Other insured events such as earthquakes, volcanic eruptions, forest fires, droughts, heat waves, cold spells, landslides and avalanches were much less frequent and caused much less damage than in previous years. The company was not optimistic about the future. "Even radical environmental protection measures cannot prevent the occurrence of ever more and ever costlier natural catastrophes worldwide," it said. [Disclaimer: This article is copyright (c) Reuters. The information contained in Reuters reports may not be republished, broadcast, rewritten or otherwise distributed without prior written permission from Reuters. This text is posted in the public interest.]
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