Topics Geo Natural Catastrophes 2006 Analyses, Assessments, Positions Topics Geo 2006

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Topics Geo Natural Catastrophes 2006 Analyses, Assessments, Positions Topics Geo 2006 Knowledge series Knowledge series Topics Geo Natural catastrophes 2006 Analyses, assessments, positions Topics Geo 2006 Topics © 2007 Münchener Rück Munich Re Group Münchener Rückversicherungs-Gesellschaft Königinstrasse 107 80802 München Germany Order number 302-05217 Contents © 2007 Picture credits Münchener Rückversicherungs-Gesellschaft Cover: Michael Spranger, Hong Kong Königinstrasse 107 Inside front cover: Reuters, Berlin 2 In focus 80802 München pp. 2/3: Reuters, Berlin Germany p. 9: Reuters, Berlin Tel.: +49(89) 38 91-0 pp.10/11: Jan Pitman/Getty Images 5 Lull in the North Atlantic? Fax: +49 (89) 39 90 56 p. 17: picture-alliance/dpa/dpaweb http://www.munichre.com p. 19: Torsten Blackwood/AFP/Getty Images 10 Catastrophe portraits p. 22 left: www.101box.com Supervisory Board p. 22 right: www.jorgent.com Dr. jur. Hans-Jürgen Schinzler (Chairman), p. 23: Ian Hitchcock/Getty Images 13 Winter 2005–2006 in Europe – An exception? Herbert Bach, Hans-Georg Appel, p. 25: Joel Nito/AFP/Getty Images 18 Stormy times down under Holger Emmert, Ulrich Hartmann, p. 29: Michael Spranger, Hong Kong Dr. rer. nat. Rainer Janßen, p. 30 left, right: Michael Spranger, Hong Kong 24 2006 typhoon season in the Northwest Pacific Prof. Dr. rer. nat. Henning Kagermann, p. 33: Reuters, Berlin 28 The Yogyakarta earthquake Prof. Dr. rer. nat. Drs. h. c. mult. Hubert Markl, p. 35 top, bottom: Reuters, Berlin 32 Tsunami strikes Java Wolfgang Mayrhuber, Kerstin Michl, pp. 36/37: Reuters, Berlin Cover: Prof. Karel Van Miert, Ingrid Müller, p. 41: Thomas Loster, Munich In the early hours of 27 May 2006, the densely Prof. Dr. jur. Dr.-Ing. E. h. Heinrich v. Pierer, p. 48 (1): Reuters, Berlin 36 Climate and climate change populated region to the south of Yogyakarta Dr. e. h. Dipl.-Ing. Bernd Pischetsrieder, p. 48 (2): picture-alliance/dpa was shaken by an earthquake of magnitude Dr. rer. nat. Jürgen Schimetschek, p. 48 (3): AP Photo/Mark Baker Dr. jur. Dr. h. c. Albrecht Schmidt, p. 48 (4): picture-alliance/dpa/dpaweb 39 The economic sector and climate change 6.3, which rendered a million people homeless in a matter of seconds. More than 5,700 were Dr. phil. Ron Sommer, Wolfgang Stögbauer, p. 48 (5): Reuters, Berlin 42 Data, facts, background killed. Josef Süßl, Judy Võ p. 48 (6): AP Photo/Dita Alangkara p. 48 (7): Reuters, Berlin Responsible for content p. 48 (8): Reuters, Berlin 44 NatCatSERVICE Below: Just weeks after the Yogyakarta earthquake, Corporate Underwriting/Global Clients p. 48 (9): Reuters, Berlin Java was hit by another catastrophe. A strong Geo Risks Research p. 49 (1): AP Photo/Fernando Bustamante 45 The year in figures earthquake some 200 km off the coast trig- p. 49 (2): Reuters, Berlin Contact p. 49 (3): AP Photo/Aaron Favila 46 Great natural catastrophes 1950–2006 gered tsunami waves of up to seven metres in height. The population was not alerted since Angelika Wirtz p. 49 (4): AP Photo/Str 48 Pictures of the year the region had no viable early-warning system Tel.: +49(89) 38 91-34 53 p. 49 (5): AP Photo/Aaron Favila 50 2006 hurricane and typhoon chronicle at the time. As a result, more than 650 people Fax: +49 (89) 38 91-7 34 53 p. 49 (6): Tony Karumba/AFP/Getty Images lost their lives in this tragic event. E-mail: [email protected] p. 49 (7): Reuters, Berlin p. 49 (8): AP Photo/Matt Dunham Order numbers p. 49 (9): Reuters, Berlin German 302-05216 English 302-05217 French 302-05218 Spanish 302-05219 Italian 302-05220 Printed by Druckerei Vogl Tölzer Strasse 5a 81379 München Germany The broad range of Munich Re’s geoscientific knowledge may be found at www.munichre.com. Besides supplying basic scientific and insurance information on the subject of natural hazards, it presents analyses of topical loss events and interactive hazard maps for all regions of the world. Munich Re, Topics Geo 2006 Analyses – Assessments – Positions For the past 13 years, we have presented the results of our annual worldwide survey of natural catastrophes in Topics Geo. Long-standing readers will notice that the approach is different this year. The new format, starting with the subtitle, Analyses – Assessments – Positions, reflects this change of emphasis. Instead of constituting an essentially statistical study of natural catastrophes, the focus is now on providing background analyses that are of practical application. Winter Storm Kyrill, which struck in mid-January 2007, presented the insurance industry with a loss of several billion dollars and confirmed our prediction that an exceptionally warm winter, like the one we are experiencing this year, would entail a particularly high storm risk. This year has again shown that there will be a long-term increase in weather extremes in Europe as well as elsewhere. Winter storms, in particular, are likely to increase in severity. It is true that, compared with the record losses of 2004 and 2005, the natural catastrophe situation could have been far worse in 2006. In fact, the unexpect- edly weak 2006 hurricane season gives rise to a considerable number of under- writing issues. Should we revise last year’s estimates? What were the factors behind the fall in the number of hurricanes in 2006? What can we expect in the years to come? The article “Lull in the North Atlantic?” on page 5 provides detailed answers and explains Munich Re’s standpoint. The catastrophe portraits analyse the significance of individual major events for the insurance industry: Europe’s exceptional snowfalls, Australia’s probably most severe cyclone on record and the Indonesian earthquake in which several thousand people lost their lives. We discuss how to determine what constitutes an event in the context of Europe’s snow pressure losses, consider possible cyclone scenarios for Brisbane, and examine the loss potential of an earthquake in Jakarta. A chapter on climate and climate change looks at the implications of the many scientific studies published in 2006 and the political debate on climate change for the insurance industry. The issue is rounded off with the latest frequently-quoted worldwide statistics from NatCatSERVICE. It contains great deal of information that I am sure will be of practical use in your professional life and I wish you, accordingly, an interesting read. Munich, February 2007 Dr. Torsten Jeworrek Member of the Board of Management Corporate Underwriting/Global Clients 1 In focus 2006 hurricane season – Why were the forecasts wrong? Most experts believed that Katrina and the other 2005 hurricanes were a sign of above-average storm activity to come. Why did it not happen? What will next season bring? Scientists have been examining the implications whilst the insurance industry has been reviewing its storm models. Between 24 August and 1 September 2006, the Caribbean was pounded by Hurricane Ernesto, which subsequently swept northwards along the east coast of Florida. This photograph taken in Cuba gives some idea of the ease with which hurricanes are able to wrest buildings from their foundations and toss cars around like toys. Ernesto caused damage amounting to US$ 500m, half of which was insured. Munich Re, Topics Geo 2006 In focus Lull in the North Atlantic? Following record hurricane insured losses in 2004 (some – The number of US landfalls in 2006 was below the aver- US$ 40bn) and 2005 (around US$ 80bn), one fact in particu- age, totalling four (all below hurricane force). During the lar stands out when we look back at the 2006 North Atlantic preceding high-activity phase, the annual average was hurricane season: we did not experience the high levels of around five, two of hurricane force. activity forecast by all the reputed institutes. There were only ten named tropical storms, five of which reached The main issue for the insurance industry is whether, in the hurricane force. light of 2006, we are justified in adjusting our risk manage- ment to reflect loss frequencies since 1995 (the onset of the The following aspects are especially striking: Atlantic warm phase). To answer that question, we need to examine the cyclones that occurred in the North Atlantic in – This is in line with the average over the past 56 years. 2006 and conduct a scientific analysis of the reasons for During this period, there have been around ten named the below-average level of activity. cyclones per year, including six of hurricane force (i.e. with wind speeds exceeding 118 km/h). Tropical cyclones in the North Atlantic in 2006 – If we look at the high-activity phase (Atlantic warm Three tropical storms made landfall on US territory; phase) since 1995 in isolation, the 2006 hurricane season Atlantic cyclones also hit Haiti, Cuba, Bermuda and the was well below par. In the period 1995–2006, there were Azores (Fig. 1). on average more than 14 named storms per year, of which eight reached hurricane force. – Alberto struck Adams Beach, Florida, on 13 June; Tropical Storm Beryl swept across Nantucket Island, – With only two hurricanes of category 3 or more (i.e. with Massachusetts, on 21 July. wind speeds of over 178 km/h), 2006 was below the 1900–2006 average (three) and well below the average – Chris weakened to a tropical depression and only for 1995–2006 (about four). brought precipitation to Cuba on 5 August. 5 Munich Re, Topics Geo 2006 In focus – Ernesto grazed southwest Haiti on 27 August and struck Scientific reasons for the low level of activity Cuba (Playa Cazonal) the following day as a tropical storm. It maintained this force when it reached Florida Sea surface temperature (Plantation Key) on 30 August and North Carolina (Long Beach) on 1 September.
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