Munich Re says claims will be second highest ever
Weather-related disasters and earthquakes are likely to make 2008 the second most costly year for insurers after 2005, when Hurricane Katrina struck the United States, a Munich Re has told Reuters.
Losses in 2008 are around $160bn (£107bn) so far, Thomas Loster, chair of Munich Re Foundation, told Reuters on the sidelines of the climate talks in Poznan, Poland.
He said it was likely to have been surpassed only by 2005, when Katrina contributed to losses of $22bn. The most costly so far was May's earthquake in China.
Munich Re said in a study with the UN Environment Programme that weather-related disasters seemed to be on the rise, in line with forecasts by the U.N. Climate Panel that blames mankind for global warming.
"Since the 1980s, earthquakes have risen by around 50% but weather-related hazards such as major floods have increased by as much as 350% and those from wind storms have doubled," the report said.
At the UN conference on climate change, proposal from the Munich Climate Insurance Initiative, a coalition of insurers, non-governmental organisations and climate change experts, outlines a mechanism to manage climate risk that could be part of a new global pact on climate change due to replace or extend the Kyoto Protocol from 2013.
The proposal says premiums for insuring property and infrastructure in developing countries from extreme events would be between $3bn and $5bn a year. Adding insurance for medium-scale losses and prevention measures would raise the annual cost to around $1bn.
Reuters reports: "I am surprised countries have not blinked at this yet," said Koko Warner from the United Nations University, who presented the proposal to negotiators. "It made us nervous but we had to say what the cost would be."