North America most affected by increases in extreme weather

Number of weather-related loss events quintupled between 1980 and 2011

North America has experienced the largest increases in extreme weather loss events, according to a new study by Munich Re.

The publication “Severe weather in North America” found that the overall loss burden from weather catastrophes between 1980 and 2011 was US $1,060 billion (in 2011 values).

The insured losses amounted to US $510 billion, and some 30,000 people lost their lives due to weather catastrophes in North America during this time frame.

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With US $62.2 billion insured losses and overall losses of US $125billion (in original values) Hurricane Katrina in 2005 was the costliest event ever recorded in the US. Katrina was also the deadliest single storm event, claiming 1,322 lives.

The North American continent is exposed to every type of hazardous weather peril – tropical cyclone, thunderstorm, winter storm, tornado, wildfire, drought and flood. One reason for this is that there is no mountain range running east to west that separates hot from cold air.

Nowhere in the world is the rising number of natural catastrophes more evident than in North America. The study shows a nearly quintupled number of weather-related loss events in North America for the past three decades, compared with an increase factor of 4 in Asia, 2.5 in Africa, 2 in Europe and 1.5 in South America.

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Storms dominate the weather loss statistics; they account for 76% of overall losses (US $805bn since 1980) and – due to high insurance penetration – for 89% of insured losses (US $454bn). 2005 was the major hurricane year when Katrina, Rita and Wilma occurred and 2011 the record year for thunderstorm related losses, when the US suffered US $26bn in insured property losses from that kind of events alone.

The study draws special attention to thunderstorms: besides tropical cyclones, thunderstorms are the most important severe weather hazard for the insurance industry in the US. Between 1980 and 2011, 43% of insured property windstorm losses (US$ 180bn) were caused by severe thunderstorms. Thunderstorm-related losses have increased over the past 40 years. The study identifies two major drivers of this trend. One factor is urban sprawl exposing higher destructible values to the forces of thunderstorms. Parallel to this, the study provides strong indication that changing climatic conditions are having a visible impact.

Read: 5 steps to prepare your business for climate change

Other events like heat-waves, droughts and wildfires contributed 15% (US $160bn) to the overall losses from severe weather events, with droughts accounting for more than half of this. Climate change will alter the occurrence of extremely dry and hot weather conditions. The loss potential of droughts and heat-waves is often underestimated, as their impact is only felt gradually but affects every sector from private households, infrastructure and power supply to agriculture over a huge area. On top of this, long dry periods create ideal conditions for promoting the outbreak and spread of wildfires.

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