Wild Weather Shows Need for Insurer Rethink: Munich Re

Reinsurer says weather-related cats have risen threefold since 1980

Reinsurance giant Munch Re says increasingly unpredictable weather means primary insurers need to re-examine their risk management practices.

In a news release this week, Munich noted that the number of weather-related natural catastrophes worldwide that have resulted in losses increased roughly threefold in the period 1980-2013, and the number of thunderstorms in Europe more than tripled over the same period.

Read: Could a Natural Disaster Lead to Insurer Insolvency?

Summer hailstorms have also become more frequent, including last year’s German hailstorm that caused nearly $4 billion in insured losses.

“For primary insurers, this means rising income uncertainty and more volatile results”, said Ludger Arnoldussen, member of Munich Re’s board of management.

Read: Defence Measures Can Drastically Reduce Flooding

“Changing weather risk patterns necessitate an adjusted perception of risk and bespoke reinsurance protection. We need a better understanding of hazards and potential accumulation risks, and we need to analyze the risk locations in this regard.”

Exceptionally persistent atmospheric conditions may even threaten the financial success of non-insurance companies, Munich said—for example, energy companies, if a winter is unusually warm and people heat their homes less.

Follow us on Twitter at @CITopBroker for more of the latest news

A TC Media site,
Business Solutions

TC Media

Transcontinental Media G.P
1110 René-Lévesque Bldv W.
Montréal, QC H3B 4X9
(514) 392-9000