Study on weather disasters shows claims of increased damage costs aren’t rooted in climate, but rather, society

“…societal change is sufficient to explain the increasing costs of disasters at the global level…”

We often hear of the wailing by climate activists and in the MSM about the huge cost numbers related to weather disasters, as if somehow these numbers are indicative of a trend linkable with ‘climate change’. For example, USA Today’s Doyle Rice reported in 2012 this headline:

Report: Climate change behind rise in weather disasters

The number of natural disasters per year has been rising dramatically on all continents since 1980, but the trend is steepest for North America where countries have been battered by hurricanes, tornadoes, floods, searing heat and drought, a new report says.

The study being released today by Munich Re, the world’s largest reinsurance firm, sees climate change driving the increase and predicts those influences will continue in years ahead, though a number of experts question that conclusion.

Atmospheric scientist Clifford Mass of the University of Washington also has a problem with Munich Re’s findings, saying that once the data are adjusted for population there is no recent upward trend in tornado or hurricane damages. Also, he adds that there is no evidence that global warming is causing more extreme weather in the USA.

Of course, any time an insurance company dabbles in science related to losses, you can be sure there’s a motivation other than pure science behind it. Shalini Mohleji and Roger Pielke Jr. thought this was worth examining to see if it such claims held up, and it turns out, they don’t.

The new paper:

Reconciliation of Trends in Global and Regional Economic Losses from Weather Events: 1980–2008

Shalini Mohleji and Roger Pielke Jr.

In recent years claims have been made in venues including the authoritative reports of the Intergovernmental Panel on Climate Change and in testimony before the US Congress that economic losses from weather events have been increasing beyond that which can be explained by societal change, based on loss data from the reinsurance industry and aggregated since 1980 at the global level. Such claims imply a contradiction with a large set of peer-reviewed studies focused on regional losses, typically over a much longer time period, which concludes that loss trends are explained entirely by societal change. To address this implied mismatch, we disaggregate global losses from a widely utilized reinsurance dataset into regional components and compare this disaggregation directly to the findings from the literature at the regional scale, most of which reach back much further in time. We find that global losses increased at a rate of $3.1 billion/year (2008 USD) from 1980–2008 and losses from North American, Asian, European, and Australian storms and floods account for 97% of the increase. In particular, North American storms, of which U.S. hurricane losses compose the bulk, account for 57% of global economic losses. Longer-term loss trends in these regions can be explained entirely by socioeconomic factors in each region such as increasing wealth, population growth, and increasing development in vulnerable areas. The remaining 3% of the global increase 1980 to 2008 is the result of losses for which regionally based studies have not yet been completed. On climate time scales, societal change is sufficient to explain the increasing costs of disasters at the global level and claims to the contrary are not supported by aggregate loss data from the reinsurance industry.

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60 thoughts on “Study on weather disasters shows claims of increased damage costs aren’t rooted in climate, but rather, society

  1. If there has been little societal change on the African continent in the period under study, then there will be no reported increase of events related to climate factors such as global warming.
    Does the Munich Re report mention Africa? Or does it confine itself, like the legendary dermatologist, to diseases of the rich?

  2. What is a “climate timescale”? Seems a nonsensical phrase.

    REPLY: Typically 30 years is used for a climate data timescale – Anthony

  3. @Jeff Alberts-It just means the long term trend. There’s almost 30 years worth of data, so they are talking about the trend from 1980-2008.

  4. Geoff,
    The reinsurance industry offers guarantees against catastrophic losses where insurance carriers are writing policies. Not so many policies are written in Africa compared to Long Island or the Texas Gulf Coast. Additionally, the values of the properties are lower in Africa, as a whole, than in the more developed areas.

  5. Andrew says:
    February 28, 2014 at 7:46 pm

    @Jeff Alberts-It just means the long term trend. There’s almost 30 years worth of data, so they are talking about the trend from 1980-2008.

    But that’s arbitrary.

  6. It’s not only this kind of insurance that has increased due to weather events. In Australia the 2010/11 Queensland floods were “assisted” by an increase in the Medicare levy (A levy to fund the public health system) on every taxpayer in the country. That was supposed to be for only 12 months only. The increase of 0.5% is still in place AFAIK.

    I have a friend who works in the insurance industry in Africa, Kenya. She is finding it hard to sell any kind of insurance to anyone. I guess most people are more focused on finding enough money to buy food and shelter. Another friend in the industry here in Australia. According to him, there has been no signifiant increase in claims against insurance policies due to weather events, but policy costs still continue to rise. Bush fires are another story as many of them are started by arsonists.

  7. Jeff Alberts on February 28, 2014 at 8:20 pm

    Yes, well known as cherry picking … 30 years may be a long time compared to a human life, but in geological time it’s not even a blink of an eye; statistically w/o value.

  8. There would be no use for insurance if the weather behaved itself. Nations that have nothing to generate jobs rather then consumerism need disasters to unlock cash that has been locked away by insurance companies to help slow inflation . Just like a bailout package for the trades ,you know the people that actually work for a living . A lot of money changes hands when disasters strike.

  9. Physics for Fututre Presidents on this point:

    Starting at 49.20, some words on the damage at 51.09

    so the MSM could know this for 6 years, and the President, too…

  10. Jeff Alberts says:
    February 28, 2014 at 8:20 pm
    But that’s arbitrary.

    Yes. Just like 360 degrees in a circle or seven days in a week.

  11. Insurance, like gambling or stock market investing, is an estimate of risk vs. reward. Unlike the gambler or investor the insurance industry can dictate the rules of the risk. We will be paying once again for an unproven hypothesis.

  12. Perhaps costs are rising due to the divorce of city man and weather?
    City man saw those lovely green fields sitting empty by the river, raised taxes, drove the farmers off and proclaimed subdivisions for all.
    Happened all over North America.
    The computer models inform us that floods are a thing of the past.
    That was the answer to long term residents questions about building on flood plains.
    Of course costs are increasing.
    Stupid costs serious money, even when adjusting for population increase and inflation.
    Now after the floods, its climate change that caused them, I guess institutional memory is as good as their other promises and competency.

  13. WillR says:
    February 28, 2014 at 9:19 pm

    Jeff Alberts says:
    February 28, 2014 at 8:20 pm
    But that’s arbitrary.

    “Yes. Just like 360 degrees in a circle or seven days in a week.”

    Not unless “the” climate changes every 30 years.

  14. If I remember correctly, the movie Titanic broke the box office record set by Gone with the Wind. But if you adjust for inflation and ticket price more people went to see Gone with the Wind in the theater than Titanic.
    If you don’t adjust for inflation and increased development then of course the dollar figures are greater now than in the past.
    Repairing a “fender bender” today cost more than a new car several decades ago.

  15. You guys are missing the point. The paper is say that 1980-2008, the entire trend in disaster losses is explained by there being more and more valuable stuff to destroy.

    In other words, there is no trend left to be caused by CAGW.

    @dbstealey-What you are describing is inflation. That’s not what they are talking about. They are saying that more people, with more property, with greater real (not nominal) value. That explains any trend in disaster losses.

  16. dbstealey says:
    February 28, 2014 at 7:54 pm
    This is what I’ve always suspected. Everything costs more now, so natural disasters will be much more expensive.
    >>>>>>>>>>>>>>

    Huh. I knew you could by things like vowels, juries, and elections, but I had no idea you could buy a natural disaster. Even mother nature is on the take!

  17. Could not be simpler.
    You now have have more people with greater wealth building bigger, more expensive, high technology equipped structures everywhere, including places where people would not consider building any sort of structures in the past.

  18. You can take as an example the complaints of the younger generation in Australia, bitching that houses are too expensive now, and the baby boomers had it easy and spoiled it for everyone.

    Well, they expect to buy a 4 bedroom, 2 bathroom brick house with a double lock up garage and a lovely garden, all equipped with air-con, dishwashers, stoves, flatscreen tvs.

    Well, the first house I bought was 2 bedroom, no bathroom (well it had a room with a tub and a toilet in it that I had to rebuild), weatherboard with no garden fence or car shelter. Seller would not come down on the price so I jokingly said I’d take it if he threw in the (very old) TV. When I took it over, to my surprise there was that TV sitting in the otherwise empty house.

    First TV I’d ever owned, and I was 32 years old.

  19. Insurance companies make money when they sell premiums.
    They lose money when they pay claims.
    The best scenario therefore is when they sell premiums but don’t have to pay claims.
    So the best strategy is to scare people into buying policies for which there is little likelihood of a claim occurring. From Munich Re’s point of view they would be negligent if they didn’t drum up business with these stories.

  20. Password Protected on February 28, 2014 at 9:22 pm
    Insurance, like gambling or stock market investing, is an estimate of risk vs. reward. Unlike the gambler or investor the insurance industry can dictate the rules of the risk. We will be paying once again for an unproven hypothesis.
    ————

    Insurance companies will be all too happy to raise rates based on the perceived increase in risk. A terrorist does something in the Middle East and instantly gas at my local pump jumps up 10 cents a gallon. The MSM claims damages cost more, I’m sure insurance companies can use that perception alone to justify raising rates.

  21. Andrew on February 28, 2014 at 9:53 pm
    You guys are missing the point. The paper is say that 1980-2008, the entire trend in disaster losses is explained by there being more and more valuable stuff to destroy.
    ————-
    You don’t need a study to know this is true. Look at “tornado alley”. Back when they were writing “the wizard of oz” the place had a few scattered farms, now it’s loaded with high density housing development. Make tornado in 1914 caused a lot less damage to private property than in 2014.

    Also consider the Outer Banks, NC. Back in the 1970’s I think Nags Head had a Dairy Queen and one two lane road. Today Nags Head is indistinguishable from any other urban sprawl with car lots, malls, movie theaters, Wallmart, Lowes, etc. sprawling along a four lane highway that needs 35 traffic lights to serve all the cross streets, not to even mention the multimillion dollar rental properties. When a hurricane makes landfall there, the loss of private property is going to be staggering. Forty years ago would have seen the loss of a few humble cottages and motels.

  22. In the UK, the last Deputy Prime Minister John Prescott, was parachuted into power to please the oaf section of the Labour Party.

    This almost spherical, intellectually challenged, individual ordered the building of many tens of thousands of low cost homes on flood plains in areas of natural beauty. The idea of this class warrior – used in the same context as a climate warrior – was to royally upset those who loved the countryside and the environment.

    Any complaints from Greenpeace or any other activist group? Absolutely none.

    So in the winter of 2013/14, Mother Nature does its thing with a bout of massive flooding and once again demonstrates the stupidity of policies born out of spite and envy.

  23. ” Typically 30 years is used for a climate data timescale – Anthony”

    And because it is basically half of a very obvious cycle, it is probably the most stupid time period to use.

  24. In 1981 we moved from Terre Haute, IN, to Norfolk, VA. We had a huge four-bedroom two-story (and basement) house in TH with 12 x 12 timbers 60 feet long in the basement; I bought it in 1977 for $28K, sold in 1981 for $32K. In Norfolk I went into real estate residential sales; my first listing was a small home for $27K. By the time I got permanently out of the business in 2003, home prices had shot up; that $27K home would by 2003 have sold for over $100K, and prices went up after that before a correction started after 2008. In 1993 we moved to Mechanicsville, VA, then a rural townlet of maybe 5,000 people; it is now a full-fledged suburb of Richmond, and its population is over 35,000. We bought our home here in 1993 for $93.5K and saw its tax assessment (far short of market value) go up to almost $200K before the correction. By the time Hurricane Isabel hit in 2004 or 2005, rural subdivisions of new homes routinely advertised–as an attraction–homes “from the $300’s”, meaning over $300,000. How such prices relate to actual value is a difficult and debatable question; but if our suburb were to receive major damage and destruction from a storm, the dollar figures would resemble what in the 1980s would have been the national budget for some respectable-sized countries.

    Obviously, when figures for costs from natural disasters are cited, we expect that some allowance has been made for inflation. Even so, the losses to individuals are huge: no one can buy a $300K home without money (or could not before Fannie and Freddie got their dominant positions in the secondary market and mandated cheap mortgages for people who could not pay them back). The large losses from storms can be explained by massive price increases and swelling populations. The storms are not worse, larger, or more frequent; there are simply more people and more expensive properties in the way.

  25. Nothing that comes out of Munich Re should be believed. This is an organisation whose profitability depends on hyping the climate alarm. They have proved time and again that no facts will get in the way of their bottom line profits. In an industry filled with sharks they are at the very top.

  26. Rough translation: If you are going to build a five-bedroom McMansion in a floodplain, don’t be surprised if the river checks out your mancave.
    Some of the most expensive real estate we have in the United States is in some of the most vulnerable places that can be found anywhere. Here where I live in Chicagoland, the lakeshore attracts people willing to pay loads of money to place expensive houses on lakefront property. Problem: Storms and the natural flow of the lake currents tend to move material from the West side of the lake to the East side, so erosion is a constant. Expensive houses get demolished when the lake does what the lake has done since before Man got here. But, today we blame it on “CAGW” and try to find a way to stop that. Go figure.

  27. SIDC Sunspot Number count for February 2014 is 102.8 (non-smoothed) , which is the highest of the SC24 cycle. Graphs show that the SC24 max is some months ahead.
    There is a strong likelihood that the SSN for the SC24 max may exceed 80 as it was indicated by my projection of more than 10 years ago. This would also mean that the Dr. Svalgaards’s prediction (made around the same time) of about 70 may be left well behind, and the ‘consensus’ of the Sunspot Prediction Board for SSN around 90 may prove to be the nearest.
    If so, the Sun – Global Warming pause question may keep climate bloggers busy for some time to come.

  28. I have often read that the weather is now weird, crazy, abnormal, odd etc.

    Below is a small selection of newspaper headlines from 1935 reporting on ‘bad weather’ events and some consequences. [Some reports overlap into 1934].
    ——————————————————–
    STRANGE / ODD / WILD / WEIRD WEATHER – 1935
    Britain Has Winter Heat Wave [Jan.]

    FREAK WEATHER Winter in England FLOWERS BLOOM [Jan.]

    COLDEST WEATHER IN MEMORY. MOTOR CARS SNOWED UP. [Britain] [Jan.]

    SNOW IN MAY. Unusual Weather in England. [May]

    FREAK WEATHER Frosts in England HEAVY LOSSES [June]
    _______

    HEAT WAVE Extremes in India RECORD OF 124 DEGREES

    PHENOMENAL WEATHER UNPRECEDENTED HEAT WAVE EXTRAORDINARY RAINFALL, Calcutta

    INDIA UNDER FROST Record Low Temperatures Many Deaths from Pneumonia

    COLD SPELL ICE in Torrid India HEAVY DEATH ROLL CALCUTTA

    CATTLE KILLED BY HAILSTONES. CALCUTTA
    _______
    WILD WEATHER Violent Duststorms Sydney

    Abnormal Weather HEAVY RAIN AND FLOODS. FRUIT CROPS AFFECTED. [Australia]

    Bitterly Cold Weather RECORD FOR SYDNEY…[lowest for 71 years in April.]

    LIGHTNING, HAIL, BUSH FIRES WILD WEATHER REPORTED HAILSTONES PIERCE TANKS [Australia]

    DROUGHT HAVOC IN INTERIOR Rabbits and Drift Ravaging Land CLIMATE CHANGE [Australia]

    COOL—HOT—WET—COOL Melbourne’s Chameleon Afternoon
    _______

    DUST STORMS IN U.S.A. Whole Country Affected FREAK WEATHER EXPERIENCED…

    SEVEN DEAD IN HAILSTORM. HONOLULU

    Freak Weather:…….Niagara Freezes:

    AMERICA’S WINTER 200 Deaths From Cold Frost Reaches Florida
    _______

    SNOW IN SWELTERING SAHARA ALGIERS
    400 LIVES LOST. Torrential. Rain: Gales in Brazil. BUILDINGS COLLAPSE.

    UNPRECEDENTED WIND AND RAIN STORMS. STATE OF PUBLIC CALAMITY. Bahia (Brazil)

    Rained Jellyfish. MELBOURNE

    ls the Weather Abnormal?

    ———————
    HEATWAVES – 1935
    HEATWAVE IN FRANCE HUNDREDS OF CASES OF SUNSTROKE

    HEAT WAVE IN ITALY DEATHS FROM SUNSTROKE ["...100 deaths..."]

    …Most Of Continent, In Heat Wave [Europe]

    122 IN THE SHADE. Madras Suffers. Deaths From Heat Stroke. [India]

    WHEAT ESTIMATE IN U.S. REDUCED Effect Of Rust, Heat, And Drought

    WEATHER EXTREMES. COLD FOLLOWS HEAT WAVE. Hailstorm in Perth Suburbs

    EXTREME HEAT THROUGHOUT STATE 113 DEGREES AT WHITE CLIFFS. SYDNEY

    HEAT WAVE. High Temperatures in New Zealand

    EXTREMES IN WEATHER FOR SOUTH AFRICANS Heat Wave For Match Against Yorkshire

    HEAT WAVE IN SYDNEY MANY PERSONS COLLAPSE

    DROUGHT CONDITIONS Anxiety in Europe Heat Wave in England

    ENGLAND’S HEATWAVE. DROUGHT CONDITIONS. NO WATER SHORTAGE

    ———————
    DROUGHTS – 1935
    DROUGHT IN AMERICA DESTITUTE FARMERS MIGRATION TO ALASKA

    DROUGHT’S TOLL. 5,000,000 SHEEP DEAD. LOSSES IN QUEENSLAND

    DROUGHT IN WESTERN AUSTRALIA Critical Position

    DROUGHT IN CANADA Grasshoppers Eat Rhubarb FARMERS SAD PLIGHT

    Cargoes Firm Serious Drought in Argentina

    FLOODS AND DROUGHT. HOW CHINA SUFFERS. Children Sold for Bowl of Rice

    SOLDIERS’ BODIES GRIM HARVEST ON OLD BATTLEFIELDS Drought Dried up Swamps [France & Belgium]

    DROUGHT IN SOUTH OF ENGLAND

    IN BAD WAY New Zealand Dairymen SEVERE DROUGHT

    FOOD SHORTAGE Drought in Ceylon GOVERNMENT RELIEF

    Suffering Among Italian Troops ["Drought, malaria, flies, mosquitoes, and blistering heat...East Africa"]

    ———————
    FLOODS – 1935
    50,000 Dead in Chinese Floods

    DISASTROUS U.S.A. FLOODS Hundred Dead in Five States HEAVY DAMAGES

    WIDESPREAD STORMS FLOODS IN EUROPE AND ASIA MINOR

    FLOODS, STORMS AND TORNADOES 250 Casualties Reported Denver, Colorado

    HEAVY FLOODS IN N.Z.

    DISASTER IN JAPAN 145 People Die In Floods GREAT DAMAGE

    QUEENSLAND FLOODS. Bridges Still Under Water

    FLOODS IN CANADA HUNDREDS OF FARMS INUNDATED SEVENTEEN DEATHS REPORTED

    RHONE FLOODS Worst for 95 Years FIFTEEN LIVES LOST RIVER ELEVEN MILES WIDE

    GALE AND RAIN FLOODS IN GREAT BRITAIN

    FIJI FLOODS Severe Damage

    72 PERSONS DEAD Landslides and Floods SOUTHERN ITALY AND SICILY

    TEN FLOODS IN EIGHTEEN MONTHS [New Zealand]

    2000 DEAD Cyclone and Floods in Honduras

    FLOODS IN FRANCE Worst for 90 Years FIFTEEN PERSONS DROWNED

    2000 DEAD OR MISSING HAITI HURRICANE AND FLOODS

    SEVERE FLOODS Dead and Damage IN NEW YORK STATE

    Fatal Floods In Turkey, Spain and France

    450 BODIES NOW RECOVERED Disastrous Mexican Floods

    ———————
    TORNADOES – 1935
    ‘PLANE CRASHES IN BELGIAN CONGO Seven Killed After Tornado

    FURIOUS, TORNADO DAMAGE AT COOGEE SYDNEY

    FLOODS IN HAITI HEAVY LOSS OF LIFE 1,000 Believed Drowned Torrential Rain Follows Tornado

    TRAIL OF RUIN TORNADO AND FIRES DESTRUCTION IN SOUTHERN CALIFORNIA

    TORNADOES Sweep American States. 34 PERSONS KILLED

    FLORIDA TORNADO. Death Roll Growing. Trail of Desolation

    ———————

    STORMS – CYCLONES / TYPHOONS – 1935
    DISASTROUS CYCLONE [NW Australia]

    SEVERE CYCLONE Houses Uprooted in India

    CYCLONE IN FLORIDA Heavy Loss Of Life TOWN OF TAVERNIER RAZED

    BAHAMAS CYCLONE. Extensive Damage. 14 Deaths Reported

    HUNDREDS DEAD IN TYPHOON 75,000 HOMES LOST Destruction in Japan

    OVER 400 LOST IN FLORIDA HURRICANE MIAMI

    HURRICANE DAMAGE. THIRTY REPORTED DEAD. Cuba and Jamaica Swept

    1000 BELIEVED DROWNED IN HAITI

    HURRICANE RAGING. DAMAGE IN SCOTLAND. SHIPS AGROUND. TRAIN DERAILED

    COOK ISLANDS. Extensive Hurricane Damage

    ———————
    CLIMATE CHANGE? – 1935
    OUR CHANGING CLIMATE Scientists Talk of Post…..[ Australia's climate is bad,..]

    CLIMATIC ECCENTRICITIES [... more or less off what is regarded as the normal...]

    PLAN TO MELT THE NORTH POLE. AND IMPROVE THE WORLD’S CLIMATE. DAM 200 MILES LONG.
    ——–

    See also
    1954: A Bad Year of “Climate Change” – Natural Disasters Pummel Large Swaths of Globe, Again
    Global Weirding Late 19th & early 20th Centuries
    Extreme Climate Change: The 1933-1938 Bad weather events.
    Bad Weather of the past from Steven Goddard.

  29. If an oil company produced a paper saying agw didn’t exist, the majority of the population would treat it very suspiciously. Munich Re produces a paper saying we must all insure more at an higher premium because agw is leading to more destruction, and most of the world thinks that’s ok. Us sceptics have still got a long way to go to win this argument.

  30. First, climate-gate emails. Second, massive-failure of the pop-culture climate models. Then a few recent, long and stubbornly cold North American winters. And, a flat to downward trend in hurricane and tornado activity. Now this; “On climate time scales, societal change is sufficient to explain the increasing costs of disasters at the global level and claims to the contrary are not supported by aggregate loss data from the reinsurance industry.”

    Oh dear, I’m afraid the neo-authoritarians of the left wing may lock themselves in the bathroom.

  31. Statistician William M. Briggs used the example of comparing damage costs decades ago to those today without accounting for inflation or population differences as an example of dishonest use of statistics in a post last year. (can’t remember the exact time)

    I can’t think of even one time that the alarmist crowd have released any information that was the truth, the whole truth, and nothing but the truth. At what time will these liars be held accountable for their despicable actions? It looks like I’ll have to pray to St. Jude, patron saint of lost causes, for justice.

  32. EDavid L.: ‘Insurance companies will be all too happy to raise rates based on the perceived increase in risk.’
    Not only that, they will not lower their rates with decrease of risk. An example is home fire insurance. At least in the Netherlands the risk decreased considerably by better building, electric equipment, etc. It has become exceptional to hear the fire brigade in the streets here. Likely, the insurance companies practice double bookkeeping of the risks, one realistic for their own and one for the paying customers.

  33. “Climate change” is the convenient and much-favored scapegoat for the financially, politically, and ideologically motivated, as well as the dull-witted. The “weather-is-worse-now” meme is an easy one for people to believe, due to the in-your-face reportage of worldwide weather as news, available 24/7 now, thanks to the web.

  34. @Gunga Din

    Repairing a “fender bender” today cost more than a new car several decades ago.

    I hit a deer a few years back and it cost $3,000 to repair. Buying a new VW Beetle in 72 cost $2,000. So yea, inflation is a b-witch.

  35. Let us not forget that we continue to build living spaces up. That means more people and more property squished into less land area. The increase in density drives damage costs up for a single location. A 10 story condo building on the beach contains approximately 10 times the potential economic loss as a 1 story building of similar design in the same location. Perhaps 1 large mansion on 2 acres of land by the waterfront would actually be less expensive to the insurance companies in the event of a claim then a couple of highrises at the same location.

  36. jbenton2013 says:
    March 1, 2014 at 2:46 am

    Nothing that comes out of Munich Re should be believed. This is an organisation whose profitability depends on hyping the climate alarm. They have proved time and again that no facts will get in the way of their bottom line profits. In an industry filled with sharks they are at the very top.

    That company is mostly or entirely owned by Obama’s buddy Warren Buffett, BTW.

  37. Here is a comment I made in an earlier thread–cited below–on Munich Re’s antics.

    http://wattsupwiththat.com/2012/11/23/crowdsourcing-the-wuwt-extreme-weather-reference-page/

    Here are a few possible non-natural causes of increasing insurance claims:

    1. Greatly increased pleasure boat ownership and average pleasure boat value. (A proxy for this would be number and size of marinas and size of average berth in marinas. Another proxy would be annual sales of such boats, probably available from the Dept. of Commerce and/or some trade association.)

    2. Increased use of frozen food, and ordinary food like meats stored in a freezer–which goes bad in an outage. Plus larger modern refrigerators store more perishable items, enabling people to shop less frequently, but putting more value at risk.

    3. Increased issuance of official evacuation orders, and increasing compliance with them. These save lives but, with residents no longer in place, there’s less likelihood of vulnerable household goods being sheltered or moved to a safer location within the house during a storm or flood, of broken windows being patched up, etc. Also, there’s greater vulnerability to looting.

    4. Increasing forest grow-back in the NE of the US may have made electrical lines more vulnerable to falling trees.

    5. Possible lesser strictness with insurance claims by insurers, owing to one or both of these factors: A) Greater off-loading of risk onto reinsurers;

    B) Legally mandated standards for payment of claims. (I.e., in the litigious US, homeowners whose claims have been denied must have sued and established case law that certain rules of thumb insurers used to use to estimate the value of losses, or allowable types of claim, were too ungenerous. I think this could be a big part of the explanation, and one that outsiders would likely overlook. But my thesis is supported by the much greater increase in insurance payouts in the litigious US compared to other regions, per Munich Re’s figures. I urge researchers to probe this by, as a first step, interviewing veteran insurance agents to see if there’s anecdotal support, then checking trade journals of the industry to see if this trend was reported on in them. One clue might be the cost to insure per unit insured. If the cost of insurance is higher in the areas of the US that haven’t had increased disasters in recent decades, this could point to lesser strictness with claims as an explanation.)

    6. Possible higher-insured-house-values, due to pressure from mortgage holders (bankers, etc.). If the bank now wants, say, 90% of a house’s value to be insured compared to 50% 40 years ago, then claims will increase.

    7. Possible interaction between creeping inflation and fixed deductables. If mortgage holders set a standard 40 years ago of $1000 for deductibles (say), or if that is what is habitually chosen, then inflation will ensure that damages over the deductible amount will increase over time.

    8. Possible increasing readiness of insureds to file a claim, owing to greater sophistication about interacting with such paperwork, greater ease of doing so (e.g., online), greater assistance from emergency management agencies, more sources of information online, and greater litigiousness and lesser stoical acceptance of fate, etc.

  38. I worked for a competitor of Munich Re. We noted around 20 years ago that there was the upward trend in the insured loss of natural catastrophes was due to a combination of factors:
    1. Inflation
    2. More property to damage
    3. More property especially in exposed areas, such as coasts.
    4. More insurance being purchased, such as insurance for Business Interruption.

    The cost of Hurricane Andrew was also affected by “demand surge.” Prices for repairs and re-building went up, because of the sudden demand.

  39. Let’s say I build my home right directly on top of a set of railroad tracks where trains regularly traverse. Sooner or later, a train is going to plow through my home, right? Would the resulting disaster be the fault of climate change or rather siting my home in a vulnerable location?

  40. $36 billion in a $17.1 trillion economy isn’t much to get excited about.

    U.S. GDP in 1980 was $2.8 trillion. A ratio of 6.1:1 to today.

    Losses allegedly grew from 9 billion to 36 billion, a ratio of 4:1.

    Losses would have grown to 55 billion if they had followed GDP growth.

    Doyle Rice at USA Today seems not to have a brain, joyously reading Munich Re’s report with no critical thinking at all.

  41. Damage to property is no good thing. But it is a very good thing that there is now far more property to live in even when there a greater risk of nature damaging the more vulnerable of these properties. Building on flood plains will result in cheaper land prices, on average, and an increase in the number of plots to buy and to build on – and people should be free to buy.

  42. It’s all about the headlines. Who cares if the content is crap, most people don’t read it and even if they did, they’d have to wade through and objectively evaluate all the bafflegab and weasel words and terminology.

    “A lie can travel half way around the world while the truth is putting on its shoes.”

    Scammers know this truism, so they keep the supply topped-up.

  43. There’s always creative accounting by AGWers, like the claim that wind is cheaper than fossil fuels…after you factor in “health and environmental damages ” which are more made up stats.
    Don’t know that it’s working so well because I look at Yahoo’s news page everyday and their top story is ALWAYS a global warming/worse than we thought story. The commentators are having none of it though.

  44. folks keep talking about all the Big Oil money behind climate change skeptics, yet no one really bats an eye when an insurance company (Munich Re) comes out with a paper that basically supports them raising rates simply because a new day dawns?

    Imagine the uproar if Exxon or BP came out with a study that shows how many lives oil has saved this year – it fuels every emergency vehicle going to save lives, every helicopter that med vacs a patient, it fuels the trucks and ships that carry food to people all over the world. Oil saves lives, so we need to raise prices. That would never happen.

    Yet that’s what the insurance industry is doing. Clever, clever people they are!

  45. NRG22
    Interesting stats from Munich Re, particularly the global one on their interpretation of the total number of disasters. The value one is of no importance from a climate perspective, one incident can dwarf all if it hits the right spot.

    This compares to the UN disaster stats as per below link which shows a rather different picture.

    http://www.preventionweb.net/files/20120613_ClimateDisaster1980-2011.pdf

    The only one where you see a clear upward trend is the flood statistic, the other 3 show either a decline or basically no change.
    Most floods where there is damage to property are indeed anthropogenic in nature, happy to concede that and the increase in floods is likewise.
    Some evidence to that is that if not I would expect the storm statistic to show an increase also but this is in decline, although even if it that was to go up it does not necessarily prove a human link.

    While I don’t necessarily trust the UN numbers either I like to think that they have less of a financial interest, other then empire building and organizing another round of discussions on mitigation, in this data then Munich Re.
    As such one would have to conclude that the Munich Re numbers are disasters in their own right.

  46. jbenton2013 says:

    Nothing that comes out of Munich Re should be believed…

    Very true. Their business depends on hyping disasters so they can raise rates.

    Here is a chart of the actual trend in natural disasters.

  47. Sorry Gunga, that was a bit terrible :) No, the number of people who watched a movie does NOT change if you adjust for inflation ;)

  48. markx says:
    February 28, 2014 at 10:58 pm

    You can take as an example the complaints of the younger generation in Australia, bitching that houses are too expensive now, and the baby boomers had it easy and spoiled it for everyone.

    Well, they expect to buy a 4 bedroom, 2 bathroom brick house with a double lock up garage and a lovely garden, all equipped with air-con, dishwashers, stoves, flatscreen tvs.

    Well, the first house I bought was 2 bedroom, no bathroom (well it had a room with a tub and a toilet in it that I had to rebuild), weatherboard with no garden fence or car shelter. Seller would not come down on the price so I jokingly said I’d take it if he threw in the (very old) TV. When I took it over, to my surprise there was that TV sitting in the otherwise empty house.

    First TV I’d ever owned, and I was 32 years old.
    =====
    damn you got a tv included?
    I musta got robbed:-)
    bought a fallen down cottage for 18k at 32
    spent 16 years rebuilding it and still had no tv..couldnt afford an aerial
    and really for whats on wasnt worth the cost anyway:-)
    but yes you are right, they want it all like the parents or the TV shows but dont have the income..bu the banks dont mind theyll get the payments and the repo it sometime in the next few yers the way the economys going lately.
    most Aussies just dont get how many middle class americans lost the lot, reckon it cant happen here..
    big shocks coming.

    • @Gunga Din Thank for the link to the adjusted numbers! I guess Hollywood is based upon dollars and not head count, but at least one can do honest comparisons with the information from your link,

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