2016 global cat loss bill already $70bn: Munich Re

Powerful earthquakes in Japan and Ecuador, storms and flooding in Europe and the US and forest fires in Canada have contributed to total losses of $70 billion for the first half of 2016, significantly higher than the corresponding figure of $59 billion the previous year, according to a Munich Re report.

The natural catastrophe figures show that overall losses were above the inflation-adjusted average for the last 30 years ($63 billion), but below the average for the last 10 years ($92 billion).

The total insured losses, on the other hand, were in line with the inflation-adjusted average for the last 10 years and above the average for the last 30 years ($15 billion).

The largest contributor to the figure of losses were the two earthquake on the Japanese island of Kyushu in April ($25 billion, of which $6 billion was insured).

Torsten Jeworrek, board member at Munich Re, said: “These events clearly show the importance of loss prevention, such as protection against flash floods or the construction of earthquake-resistant buildings in high-risk areas. The good news is that improved building codes and a more intelligent approach by emergency services and authorities offer people much better protection than used to be the case.”

Peter Höppe, head of Munich Re’s Geo Risks research unit, added: “The fading El Niño again showed its teeth with forest fires in Canada caused by the dry conditions and heat, and a series of storms in Texas, bringing billion-dollar losses. The complete absence of tropical cyclones in the north-western Pacific in the first half of the year is also likely to have been influenced by El Niño. Typhoon Nepartak, which hit China and Taiwan in early July, was the first for a long time.

“In the third quarter of 2016, the Pacific climate oscillation ENSO is expected to switch to a La Niña phase, which then influences other weather patterns across the world. For example, La Niña tends to promote the formation of hurricanes in the tropical North Atlantic and a greater number of typhoons in the Philippines."