Typhoon Haiyan and exceptionally high losses from weather-related catastrophes in Europe dominated the overall picture of natural catastrophes in 2013, according to Munich Re. Floods and hailstorms ravaged central Europe, and Haiyan—one of the strongest cyclones in history—resulted in more than 6,000 fatalities in the Philippines.

Globally, losses from natural catastrophes in 2013 were somewhat more moderate. Overall losses of around $125 billion and insured losses of around $31 billion remained below the average of the past 10 years ($184 billion and $56 billion, respectively).

The year saw a total of 880 natural catastrophes, compared to the 10-year average of 790, and more than 20,000 people were killed.

The June floods in central Europe and floods in Canada ranked among the top five catastrophes worldwide in terms of overall cost and insured costs, but three of the top five events—Haiyan, an earthquake in China in April, and a typhoon in China and Japan in October–were largely uninsured.

MunichNATCAT 2013 Overall

“Several of the events of 2013 illustrated how well warnings and loss minimization measures can restrict the impact of natural catastrophes. In the case of the most recent winter storms in Europe, for example, the losses remained comparatively low,” said Torsten Jeworrek, Munich Re board member responsible for global reinsurance business.

“At the same time, events like those in the Philippines show the urgent need for more to be done in developing and emerging countries to protect people better. This includes stabler buildings and protection facilities, and insurance programs—also with state backing—to provide those affected with financial assistance after a disaster,” Jeworrek added.

North America: Quiet Hurricane Season But Devastating Tornadoes

The 2013 North Atlantic hurricane season was very quiet, with the lowest number of hurricanes since 1982 and no hurricane-strength storms making landfall in the United States, according to Munich Re.

A total of 13 named storms formed in the tropical North Atlantic, and only two (Ingrid and Humberto) achieved even Category 1 hurricane status—well below the long-term average of six hurricanes.

Peter Höppe, head of Geo Risks Research at Munich Re, said the quiet season was caused by adverse conditions, including exceptionally dry air combined with high wind shear. “But these are unpredictable short-term phenomena,” he cautioned, “and the risk situation overall remains unchanged. We are still proceeding on the assumption of a continued natural warm phase in the North Atlantic with the higher hurricane activity typical of this.”

Still, the United States had to bear insured losses of $12.8 billion, with 69 severe thunderstorm events contributing $10.3 billion to the total.

Insured losses in the United States in 2013 totaled $12.8 billion—far below the 2000 to 2012 average loss of $29.4 billion

The most serious natural catastrophe to hit the U.S. in 2013 was a series of very severe tornadoes in Oklahoma. On May 21, an EF-5 tornado devastated the suburb of Moore, leaving 10,000 houses damaged or destroyed and resulting in an insured loss of $1.8 billion. Another series of tornadoes caused serious damage in Illinois on Nov. 17.

“The need for sound building science research that leads to stronger, safer homes, businesses and communities is apparent. Nowhere in the world is the rising number of natural catastrophes more evident than in North America, where the number of weather-related loss events has almost quintupled over the past three decades. And the losses from severe thunderstorms in the U.S. are on the rise as well,” said Tony Kuczinski, president and CEO of Munich Reinsurance America Inc.

Europe: June Flooding and German Hailstorms

The costliest natural catastrophe in terms of overall economic losses was the flooding in southern and eastern Germany and neighboring states at the beginning of June, with overall losses of $15.2 billion. With insured losses of $3.0 billion, the event ranked as the second costliest natural catastrophe for the insurance industry globally.

MunichNATCAT 2013 Insured

Germany, in fact, ranked as the second largest contributor to worldwide insured losses (behind the United States) with total insured losses for the country exceeding $6.6 billion.

The flooding was the result of days of heavy rainfall on already saturated ground. Flood-protection measures taken in many places upstream caused the situation to be worse downstream, with the waters rising even higher than in the hundred-year flood of 2002, when the overall loss Europe-wide totaled $16.5 billion, of which $3.4 billion was insured.

“The 2013 floods showed that flood control can work,” said Höppe. “It also demonstrated that flood control has to cover the whole course of a river and cannot just consist of dykes.”

hail-claimsThe most expensive event for the insurance industry in 2013 was a series of hailstorms that hit northern and southwestern Germany on July 27-28. Some of the hailstones were bigger than tennis balls, and one was measured at 14 centimeters in diameter—a record for Germany.

The hailstones damaged numerous cars, building façades, roofs and solar installations.

Asia: Typhoon Haiyan Could Be Strongest Tropical Storm Ever to Make Landfall

The most severe catastrophe in human terms was caused by Typhoon Haiyan, which tore across the southern Philippines on Nov. 7 with maximum wind speeds of well over 300 km/h.

Haiyan was probably the strongest recorded cyclone ever to make landfall. Many settlements like the coastal city of Tacloban were razed almost to the ground, more than 6,000 people were killed, and millions were left homeless.

“Haiyan shows the importance of government measures in construction planning. The Philippines is the country most frequently affected by tropical cyclones,” said Ludger Arnoldussen, whose responsibilities on Munich Reʼs board of management include the Asian markets.

“At the same time, insurance programs can help provide the people affected with quicker financial support. Studies sponsored by Munich Re have shown that insurance against natural catastrophes in emerging countries has the greatest relief effect in macroeconomic terms,” he said.

The 2013 typhoon season in the Pacific was above average in terms of activity, with 31 named storms.

“The destructive power of typhoons threatens coastal regions, islands and also inland regions throughout Southeast Asia. Based on a natural cycle, our analyses predict the beginning of a phase with higher typhoon activity for the coming years,” added Arnoldussen.

Source: Munich Re