False sense of security from low cat losses
Despite a year of relatively low catastrophe losses, insurers should not fall into a false sense of security.
This is according to Torsten Jeworrek, a Munich Re board member, who added that overall the risk situation has not changed and that “there is no reason to expect a similarly moderate course in 2015. It is, however, impossible to predict what will happen in any individual year.”
Munich Re’s review of the natural catastrophes in 2014 found that the absence of very severe catastrophes and a quiet hurricane season in the North Atlantic meant that losses from natural catastrophes in 2014 were much lower.
Overall losses from natural catastrophes totalled $110bn, down from the previous year of $140 billion, of which roughly $31 billion was insured, compared with the previous year of $39 billion.
Cyclone Hudhud in India was the most expensive event in terms of overall loss with losses reaching $7 billion. Around 7,700 people lost their lives in natural catastrophes. The costliest natural catastrophe for the insurance industry was a winter storm with heavy snowfalls in Japan, which caused insured losses of $3.1 billion.
“Though tragic in each individual case, the fact that fewer people were killed in natural catastrophes last year is good news. And this development is not a mere coincidence. In many places, early warning systems functioned better, and the authorities consistently brought people to safety in the face of approaching weather catastrophes, for example before Cyclone Hudhud struck India’s east coast and Typhoon Hagupit hit the coast of the Philippines,” said Jeworrek.
