Recent Global Catastrophic Disasters |

Recent Global Catastrophic Disasters

Below, we discuss some recent catastrophic disasters.

The past two years have held records for catastrophic natural disasters. The first 6 months of 2011 alone saw one of the five strongest earthquakes the world has ever seen that snowballed into a massive tsunami and devastated the coastline of Japan, initiating a nuclear crisis. A series of floods, mudslides and landslides took place in several towns of the mountainous region in the Brazilian state of Rio de Janeiro resulting in over 1,000 deaths and is listed as the second deadliest non-cyclone storms of all time. 2011 was the most expensive year on record for insured losses caused by these record earthquakes and flooding.

A series of incredibly strong and disastrous tornadoes in the U.S., severe and widespread flooding in Australia, and a New Zealand earthquake measured 6.3 on the Richter scale. By the latter half of 2011, the year had already surpassed the previous record of damage set in 2005. The measure in financial loss came to a total sum of 220 billion U.S. dollars, as well as the record for total amount of catastrophic incidents in a year.

The second half of the year pushed the record to stratospheric levels as Thailand saw one of the worst floods in the country’s history cause nearly 50 billion U.S. dollars in damage. The Phillipines were hit by a typhoon that left over half a million homeless and caused countless mudslides and East Africa was hit with the worst drought the region had seen in decades, wreaking havoc on already vulnerable food supplies and crops, causing famine that left 30,000 children dead of starvation.

Some of the most enormous Hurricanes took the spotlight in 2012 with Hurricane Katrina, Sandy, Andrew and Irene swooping in over the Atlantic wiping out homes with wind storms and floods in the New Jersey and New York areas. Economic losses were reported to be 186 billion and 77 billion in insured losses from these areas making it the third-costliest year on record for insurers according to a March 27 report by the reinsurance firm Swiss Re. These all came at a time when our economy was feeling the biggest strain ever pushing the economy into a full blown recession. Nine of the 10 most expensive events, in terms of insured losses, occurred in the U.S. in 2012 with Hurricane Sandy ranking as the most expensive event, according to Natural Catastrophes and Man-Made Disasters in 2012: A Year of Extreme Weather Events in the U.S.

All of these disasters put a huge financial strain on insurance companies because budgets are set in place long before they can predict the real volume of damage caused by these catastrophes. There is a scientific approach that helps them have some idea of how to manage called catastrophic risk modeling. According to EQECAT, which together with the ISCM (International Society of Catastrophe Managers), Risk Management Solutions, and AIR WorldWide provides most of the data and projections in this field. Catastrophic risk modeling provides essential data for global and regional insurers, reinsurers, brokers, financial markets and corporations to evaluate potential and probability of risk and financial loss from natural hazards. This modeling uses data from various scientific fields such as engineering, meteorology, seismology and actuarial science using four modules: the stochastic event, hazard, vulnerability and financial.

The Catastrophic Risk Modeling can be helpful in predicting future disasters, it’s not a cure all. The difficulty is that much of the data that founds the projections made are based on historical data and record-keeping so the predictions made are best guesses, not true predictions. However, insurance companies can guide them in devising operating plans for and give them an understanding of the various conditions for and possible outcomes of many different types and levels of natural disasters throughout the world. With the help of these plans, insurance companies are able to price policies according to the modeled risk associated with each event. “Despite the magnitude of the events in the U.S., the insurance and reinsurance industry was able to digest the losses without causing a major disruption,” Thomas Holzheu, U.S. Chief economist for Swiss Re, said in an email statement. Even Hurricane Sandy was not outside the scope of current insurance modeling Holzheu said, “While Sandy was unique in many ways, a loss of this magnitude was well within the realm of the standard catastrophe models.” By contrast, past catastrophes such as Hurricane Andrew and 9/11 changed how insurers conducted modeling and conducted underwriting,” he said.

A March 7 report by the investor group Ceres found that a majority of insurers lack a comprehensive plan to address climate change risks. The report found that Swiss Re was one of the insurance companies better prepared for climate change. This is a cautionary measure for those regions that indeed may experience even more disasters as climates continue to trend more violent in nature. Flood damage appears to be one of the mostly costly after effects of these storms causing a trend in planning a higher percentage of their budgets dedicated to flood repair or replacement.

Public Adjuster Mobile App Get Pride Adjusters for iPhone or Android to browse faster & have quick access to public adjusters nationwide(Free Mobile App)

Public Adjuster Android AppPublic Adjusters Apple IOS App