Natural Catastrophe Events 2007; Less Extreme, Greater in Number

The global insurance industry had to cope with far higher natural catastrophe losses in 2007 than in 2006, with its unusually low loss figures, according to the preliminary annual assessment by Munich Re, a global reinsurance firm.

Despite the general absence of extreme events in 2007, overall economic losses reached US$75 billion by the end of December—an increase of 50% over 2006 (US$ 50 billion). However, the loss figures were well short of 2005’s record US$ 220 billion. At just under US$ 30 billion, insured losses were almost double those of 2006 (US$ 15 billion). The number of natural catastrophes recorded in 2007 was 950 (compared with 850 in 2006), the highest figure since 1974, when Munich Re began keeping systematic records in its NatCatService database.
The figures confirm our expectations and endorse our insistence that risks be consistently written at adequate prices, despite years with comparatively low losses as in 2006. The trend in respect of weather extremes shows that climate change is already taking effect and that more such extremes are to be expected in the future. We should not be misled by the absence of megacatastrophes in 2007.
—Dr. Torsten Jeworrek, Board member

The worst human catastrophes of 2007 occurred in developing and emerging countries. Storms, floods and landslides in various parts of Asia caused more than 11,000 deaths, around 3,300 attributable to Cyclone Sidr alone, which struck Bangladesh in November.

The most severe events in terms of insured losses occurred in Europe. The insurance industry’s costliest natural catastrophe was Winter Storm Kyrill, the climax of an above-average winter storm season, which developed on 17 January from a low-pressure system over the mid-Atlantic. With wind speeds far exceeding 100 km/h – and peak gusts of over 200 km/h – it wrought havoc across Europe as far as Poland, the Czech Republic and Austria on 18 and 19 January.