2013 provided a respite for the (re)insurance industry following above-average losses in 2011 and 2012, with insured losses from natural catastrophes and man-made disasters estimated at around USD40 billion, according to Guy Carpenter & Company (see Figure 1). This is considerably less than the ten-year average loss of approximately USD60 billion and well below the most significant years of 2005 and 2011 (see Figure 2 (Inflation adjusted)). This can be partly attributed to the unusually quiet 2013 Atlantic tropical season. About 47 percent of insured losses in 2013 were reported in the Americas, 31 percent in Europe and 20 percent in Asia and Australasia (see Figure 3). Continue reading…
Posts Tagged ‘typhoons’
Guy Carpenter & Company released its 2013 Catastrophe Review, which shows that natural catastrophes and man-made disasters in 2013 resulted in insured losses of approximately $40 billion. Following above-average losses experienced in 2011 and 2012, 2013 provided a respite for the (re)insurance industry as insured losses were considerably less than the ten-year average of approximately $60 billion.
The Guy Carpenter Asia-Pacific Climate Impact Centre (GCACIC), a joint initiative of Guy Carpenter and City University of Hong Kong, today released its fourth annual report presenting the findings of the GCACIC’s research activities from the past year. The report details the findings of 22 projects conducted by the GCACIC, which focus on climate problems in the Asia-Pacific region as well as on a global scale.
Guy Carpenter reports that dynamic capital growth and ample reinsurance capacity resulted in a relatively stable renewal at April 1, 2013. In a briefing released today, Guy Carpenter comments that the convergence of traditional and alternative capital sources is changing the marketplace, with non-traditional capacity now making up an estimated 14 percent of global property catastrophe limit.
The 2012 renewal presented potential difficulties for all participants. Losses in Thailand and the after-effects of the March 2011 Tohoku earthquake combined with a hardening trend in the wider reinsurance market. The result was a complex renewal season for Japanese cedents. Careful planning by insurers and their brokers ensured that capacity was secured. But, capacity was secured at increased prices for excess of loss covers and with tightened terms and conditions in many lines.
Tropical Cyclones in 2010
For the second year running, no significant insured loss arose from global tropical cyclones. The 2010 hurricane season in the Atlantic was notable for its above-average activity and negligible impact on (re)insurers’ bottom lines, while typhoon development in the West Pacific was the lowest on record. These trends were driven by the development of a moderate La Niña event and very warm tropical Atlantic seas surface temperatures.
Johnny Chan, Dean, School of Energy and Environment, and Director, Guy Carpenter Asia-Pacific Climate Impact Centre City University of Hong Kong
Particularly since the devastation of New Orleans caused by Hurricane Katrina in 2005, many people believe that global warming could lead to more frequent occurrences of intense hurricanes like Katrina. This conclusion seems to be intuitively obvious. Global warming not only leads to increases in air temperature, but the ocean temperatures will rise as well. A warmer ocean will cause more evaporation of ocean water into the atmosphere. The energy that is absorbed by the water molecules going into the atmosphere will subsequently be released through condensation of the water vapor. Because tropical cyclones (called typhoons in Asia and hurricanes in the Atlantic) are huge cloud systems over the ocean, more evaporation, and subsequently more condensation, means that more energy is available for the tropical cyclones to develop. Thus, it seems obvious that under a global warming scenario, not only should the frequency of occurrence of tropical cyclones increase, but they should also become more intense.
Guy Carpenter Asia Pacific Climate Impact Centre: Updated Prediction of Seasonal Tropical Cyclone Activity over the Western North Pacific for 2010
Guy Carpenter Asia-Pacific Climate Impact Centre: 2010 Predictions of Seasonal Tropical Cyclone Activity over the Western North Pacific
Real-time predictions of the annual number of tropical cyclones affecting the western North Pacific and the South China Sea were first issued in 2000 by the Laboratory for Atmospheric Research at City University of Hong Kong (CityU) and annually thereafter until 2008 when such predictions were issued by the Guy Carpenter Asia-Pacific Climate Impact Centre, also at CityU. Verifications of the predictions for the past ten years have shown that the predictions are mostly correct within the error bars.