The North Atlantic region experienced relatively few hurricanes last season but insurers shouldn’t expect such favourable conditions to continue. Munich Re has warned that the natural climate cycle is in a particularly risky stage, with the effects of global warming only adding to the chance of significant damage in the seasons ahead.

Board member Torsten Jeworrek says the company’s latest GeoRisk research suggests demand for insurance is set to skyrocket as environmental knowledge spreads.

“We have no doubt that climate change and growing concentrations of values will boost demand for insurance cover in the long run,” he said. “(Those) conclusions are consistently incorporated into our risk models, thus enabling us to pursue a forward-looking underwriting policy.”

Mr Jeworrek says the world endured several small-scale natural catastrophes in 2006, with a total economic loss of around $US50 billion ($63.5 billion). The worst single event was the earthquake in Yogyakarta, Indonesia, with around $US3.1 billion ($3.9 billion) damage. Insurance penetration in the quake-affected area was slight, however, with only $US35 million ($44.5 million) worth of insured damage.