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El Nino curbs catastrophe losses: Munich Re

Global natural catastrophe losses hit a six-year low last year at $US90 billion ($128.5 billion), of which $US27 billion ($38.55 billion) was insured, according to Munich Re.

The El Nino climate phenomenon caused major floods and heatwaves in many developing countries, but this was outweighed by a reduction in North Atlantic hurricane activity.

“In terms of financial losses, we were somewhat fortunate [last year],” head of the reinsurer’s Geo Risks Research Unit Peter Hoeppe said.

“Strong tropical cyclones frequently only hit sparsely populated areas or did not make landfall. In the North Atlantic, El Nino helped to curtail the development of heavy storms. Measures to reduce loss susceptibility have also had a positive effect.”

However, scientists warn against complacency, fearing a strong La Nina – which would promote development of North Atlantic hurricanes – could follow the strong El Nino.

In 2014 losses hit $US110 billion ($157.05 billion), with $US31 billion ($44.26 billion) insured. The long-term inflation-adjusted average for the 30 years from 1985 to 2014 is $US130 billion ($185.6 billion) of losses, with $US34 billion ($45.54 billion) insured.

Last year natural catastrophes claimed 23,000 lives, and for the first time more than 1000 loss events were recorded.

The most devastating was the Nepal earthquake in April, which killed over 9000 and made more than 500,000 homeless. Just $US210 million ($299.82 million) of the $US4.8 billion ($6.85 billion) in losses was insured.

“Just like in Nepal, the proportion of insured losses for catastrophes in other developing and emerging countries remains very low,” Munich Re board member Torsten Jeworrek said.

“The insurance industry is exploring new avenues to close this gap in cover and thus to help people better cope with material losses after a catastrophe.”