The absence of very severe catastrophes and a quiet hurricane season in the North Atlantic meant that losses from natural catastrophes in 2014 were much lower.
The year at a glance
* Overall losses from natural catastrophes totalled US$ 110bn (previous year US$ 140bn), of which roughly US$ 31bn (previous year US$ 39bn) was insured.
* The loss amounts were well below the inflation-adjusted average values of the past ten years (overall losses:US$ 190bn, insured losses: US$ 58bn), and also below the average values of the past 30 years (US$ 130bn/US$ 33bn).
* At 7,700, the number of fatalities was much lower than in 2013 (21,000) and also well below the average figures of the past ten and 30 years (97,000 and 56,000 respectively). The most severe natural catastrophe in these terms was the flooding inIndia and Pakistan in September, which caused 665 deaths.
* The costliest natural catastrophe of the year was Cyclone Hudhud, with an overall loss ofUS$ 7bn. The costliest natural catastrophe for the insurance industry was a winter storm with heavy snowfalls inJapan, which caused insured losses ofUS$ 3.1bn.
“Though tragic in each individual case, the fact that fewer people were killed in natural catastrophes last year is good news. And this development is not a mere coincidence. In many places, early warning systems functioned better, and the authorities consistently brought people to safety in the face of approaching weather catastrophes, for example before Cyclone Hudhud struckIndia’s east coast and Typhoon Hagupit hit the coast of the Philippines,” said Munich Re Board member Torsten Jeworrek.
“However, the lower losses in 2014 should not give us a false sense of security, because the risk situation overall has not changed. There is no reason to expect a similarly moderate course in 2015. It is, however, impossible to predict what will happen in any individual year.”
“The patterns observed are well in line with what can be expected in an emerging El Niño phase. This characteristic of the ENSO (El Niño Southern Oscillation) phenomenon in the Pacific influences weather extremes throughout the world,” explained Peter Höppe, Head of Geo Risks Research at Munich Re. Water temperatures in the North Atlantic were below average. Atmospheric conditions such as lower humidity and stronger wind shear also inhibited the development of tropical cyclones. Even events like the severe windstorms and heavy rainfall in California in December following a long drought fit in with the El Niño pattern.
Höppe added that most scientists expect a light to moderate El Niño phase to persist until mid-2015. “Following the below-average incidence in 2014, this could increase the frequency of tornadoes in the USA. If the El Niño phase does, in fact, end towards the middle of the year, there would be no cushioning affects from the ENSO oscillation in the main phase of the tropical storm season.”
The costliest natural catastrophe of the year, Cyclone Hudhud, also illustrated the practical effect of measures by the authorities to limit damage. Hudhud reached its maximum strength on 10 October over the Gulf of Bengal, and with wind speeds of over 190 km/h, was a Category 4 storm (of a maximum 5). On 12 October, it made landfall near the Indian port of Visakhapatnam, an important economic centre with a population of two million in the Andhra Pradesh region. In some places, more than 120 litres of rain per square metre fell within 24 hours. Thanks to warnings from the Indian weather service, the authorities evacuated around half a million people and brought them to secure accommodation. This kept the number of fatalities for a catastrophe of this strength at a low level (84). Of the overall losses of approximately US$ 7bn, roughly US$ 530m was insured – a comparatively small proportion, but insurance density in India is showing pleasing constant growth.