Insured losses from weather-related events in Eastern Asia amount to only about 10 percent of the $700 billion in total losses accumulated over the last three decades, according to an analysis by Munich Re.
According to the German reinsurer, the number of weather-related events hitting the region has increased by more than a factor of four during the 33-year research time period starting in 1980.
While insured losses totaled $76 billion, 62 percent of the insured losses were attributable to Japan, Munich Re reports.
Munich Re’s research also reveals that floods caused 56 percent ($393 billion) of the overall losses in Eastern Asia, but only 30 percent of insured losses. Storms accounted for another $233 billion, or 34 percent of the total, Munich Re said, without indicating the portion of insured losses.
The number of floods has increased strongly and is expected to increase further in the coming decades, Munich Re predicts.
After floods, typhoons cause the greatest weather-related losses, Munich Re says, noting that new analyses indicate a clear cycle of activity for typhoons, and that increased typhoon activity is expected over the coming years.
Their greatest threat is to urban conurbations in Eastern Asia, especially in Japan, Vietnam, Taiwan and the Philippines, and the burgeoning megacities of Eastern China, according to Munich Re.
The occurrence of typhoons is influenced by periodic climate fluctuations, with phases lasting some 30 years. “In the last ten years, typhoon activity has been below the long-term mean level. Extrapolating these cycles into the future, we expect a phase of higher typhoon activity in the next few years,” Peter Höppe, head of Munich Re’s Geo Risks Research unit, said in a statement.
Data from Munich Re’s NatCatSERVICE since 1980 are analyzed in Munich Re’s publication “Severe Weather in Eastern Asia,” written by Munich Re experts and international guest authors from a variety of disciplines. The study focuses on eight countries: Japan, South Korea, China, Taiwan, Vietnam, Thailand, Indonesia and the Philippines.
In a statement on Monday, Ludger Arnoldussen, Munich Re Board member responsible for Asia-Pacific region, said: “With the exception of Japan, the countries analyzed in this study will continue to be inadequately insured against weather risks in the years to come. At the same time, however, the loss potentials are set to increase drastically as values rise.”
Referring to impact of Typhoon Haiyan, which swept across the Philippines on Nov. 8, Arnoldussen said the event underscores how important analysis and deep understanding of these weather phenomena are. “Governments and insurers need to develop risk-minimization strategies in order to reduce the number of victims and losses in the future,” he added.
“Insurers in particular can provide solutions to effectively manage weather-related risks. Successful examples of this can be found in the form of public-private partnerships, which help to increase insurance penetration or cover state assets such as infrastructure,” he said.
Catastrophe Event Statistics, 33 Years of Data
Referring to flood risk, in particular, Höppe said: “There is no region of Eastern Asia that is immune to the threat of flooding. The reasons for the strong increase in losses from weather catastrophes like floods are primarily socio-economic factors, such as continued strong economic growth and the resultant increase in values in exposed regions.”
According to Munich Re, since 1980:
- Nearly half, or 45 percent of all weather-related events, impacting Eastern Asia were floods.
- The next most frequent events were storms, representing 39 percent of the total.
- Forest fires, heatwaves and droughts followed at 16 percent.
A total of 120,000 people have lost their lives since 1980 as a result of these weather catastrophes—57 percent from flooding alone, and 39 percent from storm events.
Munich Re also reports that four of the five costliest weather-related catastrophes were attributable to floods.
Providing an summary of some significant weather –related events and information contained in the the 408-page report, “Severe Weather in Eastern Asia,” Munich Re said:
• Japan is primarily affected by typhoons, torrential rainfall and flooding.
- With an overall loss of $10 billion, Typhoon Mireille in 1991 was one of the biggest storms ever to hit Japan.
- Typhoon Songda in 2004 caused overall losses of some $9 billion.
- In both cases, flooding was a major source of losses.
• South Korea is affected by torrential rainfall and typhoons.
Super Typhoon Maemi in 2003 remains the strongest storm ever to South Korea, with an overall loss of $4.8 billion.
• China is severely threatened by weather catastrophes, in particular flooding, typhoons and hail but also heatwaves and sand storms.
The worst weather catastrophe in China’s history remains the flooding of the Yangtze and Songhua Rivers in 1998 with more than 4,000 fatalities and an overall loss of more than $30 billion.
• Taiwan is particularly exposed to typhoons, hail and flood.
Typhoon Morakot in August 2009 was one of the costliest storms in Taiwan’s history with an overall loss of $3.4 billion.
• In Thailand, floods pose the greatest weather risk.
- The 2011 flood was the costliest natural catastrophe ever to hit the country and the most expensive flood catastrophe worldwide, with overall losses of $43 billion.
- Insured losses for the 2011 Thailand floods were $16 billion, representing that the biggest-ever weather-related insured loss in the Eastern Asia region.
Source: Munich Re