Weather Takes Huge Toll In 2003
Posted on 1-3-2004


FRANKFURT - Natural disasters claimed seven times as many victims last
year as the year before and the trend is set to continue, says the world's
biggest reinsurance company.

Munich Re said in its annual review of natural catastrophes that
earthquakes, heatwaves and tornadoes killed 75,000 people last year.

Of those, 40,000 died in December's earthquake in Iran.

The figure was higher than the 50,000 estimate the company gave in a
preliminary report in December, largely because the full effects of the
Iranian earthquake were not then known.

"After three years of relative calm, no fewer than five great natural
catastrophes occurred in 2003," the report said.

It said those five events alone had accounted for about a third of all
economic and insured losses.

Apart from the Iranian earthquake, a heatwave which hit central and
southern Europe in the northern summer claimed 20,000 lives, and an
earthquake measuring 6.8 on the Richter scale killed 2200 in Algeria in
May.

But the most expensive disasters for insurers were in the United States,
where tornadoes battered the Midwest in May and a heatwave caused drought
and forest fires in California in October and November, destroying
thousands of homes.

The Californian fires cost the insurance industry about $2 billion, Munich
Re said.

A huge hailstorm in Texas during the tornadoes would go down in US
insurance history after generating insured losses of more than US$1
billion ($2.89 billion), it said.

In total, insured losses were 40 per cent higher than in 2002 at US$16
billion, said Munich Re, which insures insurance companies for the risks
from their policies.

Total economic losses rose 18 per cent to US$65 billion.

Munich Re said global warming would cause increasing economic damage in
the future.

In central Europe, an expected 2C increase in temperatures by the middle
of the century would cause more heatwaves and floods.

"It is to be feared that extreme events which can be traced to climate
change will have increasingly grave consequences in the future," the
report said.

Insurance premiums would rise and clear-cut indemnity limits would be needed.

"Neither human beings, buildings and infrastructure nor the agricultural
and livestock sectors are prepared for such extremes," said the report.
"We would be well advised to prepare ourselves for dramatic changes."

However, Munich Re said it believed climate protection was about to enter
"a new dimension" and welcomed the impending start of emissions trading in
the European Union in 2005, which will offer a financial incentive to
reduce pollution.

The system will allow companies that exceed their emission limits for
carbon dioxide, blamed by many scientists for global warming, to buy and
trade emissions permits.

But the EU may review its strategy of backing the Kyoto Protocol, which is
designed to limit carbon dioxide emissions, because Russian hesitations
over the accord threaten to stop it coming into force.

The US, the world's top polluter, has already refused to back Kyoto,
saying it is a regulatory straitjacket that will harm industry and
economic growth.