It turns out 2017 was a uniquely disastrous year in more ways than one, evidenced by German reinsurer Munich Re’s recently released review of the year’s global catastrophes.
Led by massive, climate change-fueled hurricanes Harvey, Irma, and Maria, 2017’s natural disasters will cost insurers a record $135 billion. Adding in uninsured losses brings the total global damages to $330 billion, which is second only to 2011.
“We have a new normal,” Munich Re’s Ernst Rauch told Reuters. Rauch, who runs the group tracking climate change risks, pointed out that “2017 was not an outlier” in having more than $100 billion in insured losses (see chart below). “We must have on our radar the trend of new magnitudes,” Rauch said.
The big reinsurers like Munich Re make their money by insuring the companies that directly insure your property. Those smaller companies are often required by law to buy reinsurance because they lack the capital resources to pay out if there is a major disaster, like superstorm Harvey for instance.
Since the reinsurers must pay out billions and billions of dollars for such mega-disasters, they have a unique incentive to understand and predict trends in mega-disasters. That’s why companies like Munich Re and Swiss Re have been at the forefront of warning businesses and the public about the rise in extreme weather events due to climate change.
Indeed, back in September 2010, another year of stunning warming-driven extreme weather events, Munich Re issued a release noting it had analyzed its catastrophe database, “the most comprehensive of its kind in the world,” and concluded, “the only plausible explanation for the rise in weather-related catastrophes is climate change.”
Then in October of 2012, the company released a massive 274-page report, “Severe weather in North America,” analyzing weather catastrophes and related losses since 1980 to understand trends and their causes, including man-made climate change.
Munich Re found that the number of weather-related loss disasters has been rising much faster in North America than anywhere else, and concluded, “Climate-driven changes are already evident over the last few decades for severe thunderstorms, for heavy precipitation and flash flooding, for hurricane activity, and for heatwave, drought and wildfire dynamics in parts of North America.”
Prof. Peter Höppe, who heads Munich Re’s Geo Risks Research unit, said at the time, “In all likelihood, we have to regard this finding as an initial climate-change footprint in our U.S. loss data from the last four decades.”
And last April, Munich Re published an article on “rapid attribution,” which explained that we can now rapidly determine how much intensity or frequency of some extreme weather events is affected by man-made climate change. Learning that, for instance, climate change has sharply increased the chances of individual extreme rain and flooding events–such as devastating August 2016 deluge and flooding of Baton Rouge, Louisiana–allows communities to do better planning and Munich Re to do better risk management.
The latest annual report amplifies the message that humans are changing the climate, boosting the intensity and frequency of extreme weather events, and that the longer we dawdle, the higher the costs we will incur. The only question is, is anyone listening?