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Extreme weather events hitting North America the hardest: Study

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Extreme weather events hitting North America the hardest: Study

North America has been most affected by extreme weather events in recent decades, according to a new study from Munich Reinsurance Co.

The Munich Re report, “Severe Weather in North America,” says that over the period studied — 1980 to 2011 — total weather catastrophe losses were $1.06 trillion in 2011 U.S. dollars. Insured losses from those weather events were $510 billion. The events were responsible for 30,000 deaths in North America.

The study showed weather-related loss events increasing nearly five times in North America over the three-decade period, compared with a fourfold increase in Asia, an increase of 2.5 times in Africa, a twofold increase in Europe and an increase of 1.5 times in South America.

The report notes that over time the primary factor behind the increase in weather-related catastrophes has been socioeconomic change, including expansion of urban areas and increased population in areas prone to weather-related hazards.

But human-influenced climate change also is a factor, according to the report, though it affects various weather risks differently.

“Climate change is tangible in this region, and the losses are coming from various sources … where it's coming from is not something that we argue, but it is tangible and the exposures are increasing more than in other areas,” said Peter Roeder, a member of the board of management at Munich Re.

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According to Munich Re, most loss-relevant natural events in North America occur in the eastern half of the U.S. and southern Canada, with most of those being storms in the Midwest, South, Southeast and Northeast U.S. According to the study, of the 3,800 loss events in North America since 1980, 2,470, or 65%, were the result of various storms; 680, or 18%, were attributable to wildfires, heat waves and droughts; and 650, or 17%, were due to floods.

The costliest single event was 2005's Hurricane Katrina, with $125 billion in overall losses, $62.2 billion in insured losses and 1,322 lives lost.

“Tropical cyclones are the most feared and devastating weather events along almost the entire North American East and Gulf coasts — especially if they develop into hurricanes,” the report said. But severe thunderstorms also pose enormous risks in North America, according to the report, with the U.S. suffering $26 billion in insured property losses in 2011 due to tornadoes, hail, wind gusts and flash floods accompanying severe thunderstorms — almost half the insured loss amount attributed to Hurricane Katrina.

From a risk management perspective, it's essential to learn about the extent to which factors such as climate change are driving changes in weather risk. As weather risks increase in North America, it's necessary for homeowners, businesses, governments, researchers and scientists and the insurance industry to work together to prevent and mitigate the effects of extreme weather events, the report said.

“There are a number of things that can be done in terms of infrastructure including looking at building codes and explaining to people that the exposures are increasing. Insurance is a good thing but it cannot be the only way we mitigate this risk,” added Mr. Roeder.

Copies of the report are available for $100 by emailing Severe.Weather.NA@munichre.com and specifying order number 302-07563.