Risky

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Which are the key events?
The predominant contribution has been the earthquake in Japan: this quake has been the most costly natural catastrophe in history. Much more expensive than Hurricane Katrina, which was up until then the most expensive natural catastrophe.  
But it is not just earthquakes. It’s the weather too. We had extreme floods in Queensland at the end of last year and early this year. These were caused by record precipitation in many places in Australia, associated with the highest sea-surface temperatures ever measured off the coast of Australia. The losses caused by large thunderstorm-related events such as tornadoes and hail in the US are at a record high, about 50 percent higher compared with 2010.

What is the long-term trend?
The long-term statistics of sea-surface temperature off the coast of Australia, but also in other ocean basins, show a significant trend upwards for the last 100 years. December 2010 had the highest sea-surface temperature on record off the Australian coast (Figure 1). The rise can only be explained by global warming.

The United States has been hit hard this year.
If you put it all together, we had an extreme record drought in Texas. We had record floods in the Missouri and Mississippi region. We had an almost record season for tornadoes in terms of the total number. But an absolute record in terms of economic losses. If you take the tornadoes as a single event, then the tornado season of 2011 is the fifth costliest natural catastrophe in US insurance history.

Do you see any long-term trends there?
We’ve done an extensive study on this. There is a long-term trend visible on the so-called convective event losses – all the losses from big thunderstorms – including hail, tornadoes, flooding. We see a significant upward trend in the US during the last decades. This is in line with some trends from meteorological data where we see a rising number of days with the potential to develop these large thunderstorm systems. When comparing regions in the trends of frequencies of weather-related natural catastrophes, we see the largest increase in North America, followed by Asia.
As the world’s largest reinsurance company you seem convinced you are seeing strong links between the trend in weather-related natural catastrophes and anthropogenic climate change.
An individual event cannot be taken as proof of climate change. Each of the events we have seen in the last decades could have happened without climate change. As you say, we are the largest reinsurer and we have good data on such weather-related extreme events. Our statistics, however, indicate significant changes. We think we can only explain the full range of these significant changes by the contribution of global warming.

An increasing global interconnectivity seems to amplify the impact of natural catastrophes. Do you see that?
We see more global connections, particularly with these large events. Take the earthquake in Japan. That had an effect on car manufacturers in the US and Europe because some parts made in Japan could not be produced anymore so they ran out of these parts and could not produce their cars.
It also had surprising political influence. If you just think of the Fukushima event. The damaged nuclear power reactors had repercussions on the energy policies of Germany, Switzerland and Italy. This has triggered new laws to phase out nuclear energy, or in the case of Italy, to cancel plans to start building such power plants.

Did it affect the global recession?
I don’t think so as most of the disasters have affected wealthy countries rather than being spread around the world. Man-made disasters like 9/11 have more of an effect on financial markets. While the financial losses are high and this means a lot in an economic sense, I don’t think they are big enough to influence the long-term international financial markets. And indeed, after such big catastrophes the repair work can boost economies.

What’s your take on the trend of global weather-related disasters?
First, the upward trend in the frequencies of loss events from natural catastrophes is predominantly down to weather-related events, not geophysical.
Losses are increasing, however, for all kinds of natural catastrophes, and the main drivers are population growth, rising wealth and increasing settlement in risky regions.