Natural disasters cost world 60 billion dollars: Munich Re
MUNICH, Germany (AFP) Dec 29, 2003
Natural disasters this year have cost the global economy more than 60 billion dollars (48.4 billion euros), the world's largest reinsurer Munich Re estimated in an annual report released Monday.

It estimated the death toll at more than 50,000, including at least 20,000 from the deadly earthquake to hit Iran last week and another 20,000 from the heat wave that swept Europe earlier this year.

In its report, the German group said tornadoes, heatwaves, forest fires and floods were the biggest causes of loss of life and economic damage.

Comparative figures for last year were 55 billion dollars and 11,000 lives lost.

Other events during the year, including electricity outages in the United States and Europe continued terror attacks, caused only minor damage and loss of life, Munich Re said.

Nevertheless, insured losses -- the amount insurance companies are obliged to pay out -- were well below the headline figure at 15 billion dollars.

Munich Re said the number of weather-related disasters was a further proof of climate change that increased the risk and potential costs to insurers.

"The insurance industry must adapt to growing risks and damage. This will need transparency and risk-limitation above all," it said, while talking also of "appropriate pricing" in a hint that premiums might have to be raised.

Broken down, Munich Re counted 70 earthquakes in total during the year that caused damage amounting to six billion dollars, although that figure does not appear to take the latest Iran temblor into account.

They included an earthquake in Algeria measuring 6.8 on the Richter scale which left at least 2,200 people dead, another in February in northwest China measuring 6.4 which damaged or destroyed 70,000 homes, and another a week ago in California which, although it caused relatively little damage, highlighted the risk of a far more devastating quake.

Munich Re also warned of the risks of more quakes in Iran and neighbouring countries because of the seismic volatility of the entire region.

Storms made up one third of the estimated 700 natural disasters counted by the reinsurance giant but accounted for 75 percent of the costs.

Tornadoes in May in the Midwest of the United States cost more than three billion dollars alone, while Hurricane Isabel ravaged the US east coast in the second half of September.

The Munich Re report warned that the European heat wave this summer, which cost the economy an unusually high 13 billion dollars, could become a regular occurrence if global warming continued at its present pace.

"We must get used to the idea that summers like this in Europe will become more common. They could become more or less the standard by the middle of the century," warned Gerhard Berz, head of Munich Re's geo-risk research group.

The report also recalled forest fires in Australia, Canada, Europe and the United States, heat waves in Bangladesh, India and Pakistan, and floods there and in China as well as earlier this month in southern France.