Munich –
Nature was not really gracious. “2020 was not a record year,” says Ernst Rauch. Nevertheless, last year nature in the form of earthquakes, droughts and storms destroyed values totaling 171 billion euros worldwide, almost half of them in the USA, says Munich Re’s chief climatologist.
That was more than the 135 billion euros in economic damage in 2019. It was also above the average of the most recent decade of 150 billion euros. In 2020, only 40 percent of all losses were insured on a global scale.
Munich Re presents disaster report
Asia in particular, but also Europe, are considered underinsured. It could also have been worse. With 30 major storms in the North Atlantic, the hurricane season there brought a peak. It just happened that there were no major values in the way of the forces of nature.
Extreme weather matches the consequences of a decades-long warming trend in the atmosphere and oceans, explains smoke with a view to droughts or forest fires and cyclones. “With all these dangers, climate change will play an increasing role in the long term,” emphasizes Munich Re board member Torsten Jeworrek.
It is therefore no coincidence that 2020 was the second warmest year in Germany since weather records began. Globally, it should have been the warmest.
Damage caused by natural disasters is rarely insured
This holds sustained damage potential. It is all the more worrying that in Europe in 2020 not even a third of the almost eleven billion euros in damage caused by natural disasters were insured.
While there is still a high insurance density in the event of a storm, it is completely different with the risk of flash floods, not only smoke warns. “We are most vulnerable in heavy rain and floods,” he says of the dangers from natural disasters that dominate our latitudes.
Nevertheless, not even half of all homeowners in Germany are insured against heavy rain and floods, according to the German Insurance Association (GDV).
Regional differences in insurance in Germany
Regional differences are enormous. In Bremen or Lower Saxony, a quarter of all homeowners hold such a policy, in Baden-Württemberg it is a good 90 percent. The latter is due to historical reasons, because a residential building policy against natural hazards was mandatory in the southwest until 1993.
Today many experts are calling for such compulsory insurance nationwide because of the consequences of climate change. GDV Managing Director Jörg Asmussen should not be fooled by the mild damage in 2020.
Less damage from storms
“2020 was a below-average claims year, mainly because there were no severe hail events,” he explains for Germany. This time, the industry here in Germany had to pay out 2.5 billion euros to customers due to natural hazards. That is below the long-term average of 3.7 billion euros.
Nevertheless, winter storm Sabine 2020 made it to the sixth place of the most costly natural disasters of all time with insured losses of 675 million euros. In contrast, Germany can increasingly benefit from improved flood protection, stresses Rauch.
Help requested from the federal government
Taking out targeted insurance against the forces of nature is not easy in Germany. Address-specific risk maps are only available for the risk of flooding near rivers. For the increasing risk of flash floods, which can occur across the board even away from rivers, such maps are still in the works and they are also missing for storms and earthquakes, the GDV criticizes.
He calls for a remedy from the federal government. “We are strongly committed to a nationwide natural hazards portal,” says Asmussen. This should include all types of natural hazards. The GDV knows that this is not currently on the political agenda. Corona now dominates politics.
Pandemic has advantages too
Rauch, on the other hand, is optimistic that the pandemic will also have something good in the medium term. “It illustrates the danger of systemic risks,” he says. Awareness of this is now growing in politics and business. This makes Rauch optimistic that the fight against climate change and its consequences will increasingly come into focus as soon as the corona crisis is over.
An EU-wide harvest policy will also be the order of the day. In the US there have been government subsidies for years. Double-digit billions of dollars flow to US farmers during droughts. “We hope that it doesn’t take a major drought before such crop insurance comes out in the EU,” says Rauch.
For he believes that it is certain that climate change will make nature a danger in the new and subsequent years. (mz)
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