Risk Factor Nature

Damage resulting from natural catastrophes in 2003 amounted to approximately EUR 50 billion, of which only about EUR 13.5 billion was insured. Two thirds of this damage was caused by merely six - out of a total of more than 140 - natural occurrences (thunderstorms and hurricanes in USA and Canada, forest fires in California, and flash floods in southern France).
 
The majority of the registered covered insurance claims in 2003 were the result of storms (EUR 6,940 million - 59%), followed at some distance by forest fire and drought catastrophes (EUR 2,050 million), and floods (EUR 1,587 million). Extreme temperatures (EUR 1,649 million) and earthquakes (EUR 336 million), as well as other natural catastrophes (EUR 1,649 million) complete the claim statistics for last year.
 
The development of the material damage becomes particularly clear when one compares the data from previous decades. We see that there were 2.2 times as many catastrophes worldwide in the 10-year period, 1994-2003, as in the 1960s. Dr. Johannes Hajek, UNIQA executive board member for property insurance and reinsurance, comments: "Over the same period, the economic damage from these occurrences was 6.7 times as high and the insured damage as much as 13.5 times as high. More than anything else, there has been a noticeable increase in damage from catastrophes since the end of the 1980s, with average insurance claims being around EUR 12 billion annually. Statistical indicators indicate that the tendency is going to continue."
 
Owing to their high standard of living and high concentration of value, the industrialised - and well insured - countries are especially affected by economic (60%) and insured (approx. 95%) damage. Two thirds of the volume of damage covered by insurance was to be found in USA (approx. US$ 14 billion) alone.
 
Europe: Heat, Storms and Floods The natural occurrences causing the worst insurance damage in Europe are heatwaves, winter storms (cyclones outside the tropics) and floods, with mudslides and avalanches in alpine regions as well. In 2003, half the natural catastrophes were storms, which, however, were reflected to a similar extent neither in property damage nor in loss of human life, (quite the opposite to the "stormy years" in 1990 and 1999). In 2003, it was the particularly hot summer that affected the victim and damage statistics.
 
Based on the results of studies and on prognoses from climate research, the insurance business is expecting extreme natural phenomena to occur more often in the future. In other words, the probability of more natural catastrophes occurring is increasing. Global warming, which is held responsible for extreme weather situations, is the most likely cause.
 
With an increase in the mean annual temperature, more frequent heatwaves and floods can both be expected. Higher temperatures lead to intensified water circulation in the atmosphere and to increased precipitation.
 
Whether global warming also affects the likelihood of winter storms occurring does not yet appear to be finally resolved. North Atlantic air pressure conditions are predominantly responsible for the development and course of winter storms. A positive NAO index (NAO stands for "North-Atlantic Oscillation") - the ratio Iceland Deep to Azores High - indicates strong Atlantic west winds (culminating in winter storms). Since the 1960s, a positive NAO index trend has been noticed. More frequent and more extreme wind occurrences are becoming more and more likely.
 
Dr. Johannes Hajek: "It is a dictate of the hour for the insurance business to study climate developments and their effects very precisely and over long periods, and to analyse the results for risk assessment. In view of this situation, new models which become effective at various levels and concern both prophylactic measures and (statutory) regulations and actuarial new assessments are required.