Allianz - Annual Insured Losses Caused By Climate Breakdown Will Rise 37% In Next Decade - Bloomberg

[hatrack]

Sept. 18 (Bloomberg) -- Insured losses from natural catastrophes caused by climate change are set to surge 37 percent in the next decade, resulting in the need for alternative ways to manage risk, said Allianz SE, Europe's biggest insurer. Annual insured losses from catastrophes such as floods and hurricanes may jump to $41 billion a year in 2010-2019, up from $30 billion a year in 2000-2006, and less than $5 billion before 1989, Munich-based Allianz said in a report released today in Sydney. Total losses in any one year may be as much as $400 billion, said Clement Booth, a member of the management board.

The United Nations concluded this year that climate change is likely caused by humans and will increase floods and droughts, change growing seasons and harm wildlife. Lloyd's of London Chairman Peter Levene said in January climate change is the ``No. 1'' issue for the world's biggest insurance market because of the unpredictability and cost of potential weather-related claims.

``Insured damages from natural catastrophes at projected future levels will put pressure on catastrophe risk markets,'' Booth said in a statement accompanying the release of the report. ``The insurance industry needs to continue to develop alternative approaches to risk transfer such as catastrophe bonds and risk partnerships between insurers and governments.''

In 2005, Hurricane Katrina caused more than $41.1 billion of insured losses in New Orleans and along the U.S. Gulf Coast, destroying platforms, pipelines and refineries and flooding homes and buildings. Total damage was $170 billion, four times the next-most devastating hurricane in the 50 years to 2000, Allianz said.

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http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ag6mOBlfHCqk

[GliderGuider]

1. "We are sorry, Mr. Karamanlis, but due to those wildfires just down the road,"

"I am here to tell you we have cancelled your fire insurance. Good day, and good luck."

[kestrel91316]

2. Ha! Way too conservative IMHO. I predict 100% increase in 10 years.

Maybe even more.

Damned ostriches.

[greenman3610]

3. You are probably right

There is a slide in the Gore climate presentation showing
increased insurance losses from major precipitation events over the
last few decades.
Based on what we've seen in the last
few decades, 37 percent is in the right direction, but would seem to
be way too conservative.