From deadly floods to hurricanes and wildfires, 2017 has been bookended by natural disasters. As well as the human and economic cost, insurers are left counting the financial impact, while anticipating the next one.
CGTN’s Owen Fairclough has more.
California’s Thomas fire has been burning since Dec 4 with damage costs exceeding $123 million.
“I referred to this fire as a beast and it’s a monster. We all recognize that, but we will kill it,” Martin Johnson, Santa Barbara County Fire Department division chief said.
California authorities said five of the state’s 20 most destructive fires in history broke out this year, when natural disasters seemed everywhere. More than 1,000 dead in flooding and mudslides in Sierra Leone, 369 lives lost in Mexico’s earthquake, while a succession of summer hurricanes and tropical storms battered the U.S.
In addition to the death and destruction insurance companies also took a hit.
“We haven’t seen this level of losses, $100 billion, in the U.S. since 2005. And as you might recall 2005 was the year we had Hurricane Katrina. To put it in perspective, the losses worldwide in 2016 were half of what the U.S. experienced this year,” said Stef Zielezienski, American Insurance Association General Counsel.
The reinsurers, the companies who cover the insurers, are particularly affected.
One of the biggest, Germany’s Munich Re, began the year forecasting annual profits of nearly $3 billion, but the U.S. disaster all but wiped those out.
So how do insurers prepare for the next time a wave of disasters hits their bottom line?
“We need to take a hard look at catastrophes and determine we have enough consumers purchasing the type of catastrophe risk insurance that they need to. And that we’re doing all we can to protect against future loss by building resilience in the community,” said Zielezienski
But while the cost of these disasters is increasing, the UN reports at least the death toll in recent years is on the decline, partly due to improved early warning systems.