Guest Post: Natural Disasters Cost The World $160 Billion In 2012

Tyler Durden's picture

Submitted by Charles Kennedy of

Natural Disasters Cost The World $160 Billion In 2012

The world’s largest reinsurance firm, Munich Re, has stated that Natural Disasters alone have cost the world $160 billion in 2012.

The US accounted for 67% of those total losses, with Hurricane Sandy proving to be single most expensive disaster of the year, costing around $50 billion in total. Munich Re actually noted that, “had it not been for this exceptional storm, losses would have been very low in 2012.”

Hurricane Sandy is the largest hurricane ever on record, and the second most expensive after Hurricane Katrina.

The second most costly natural disaster was the summer-long drought which blighted the Corn Belt across the US Midwest, causing severe crop damage to the sum of $20 billion.

Torsten Jeworrek, a member of the board for Munich Re, said that “the heavy losses caused by weather-related natural catastrophes in the U.S.A. showed that greater loss-prevention efforts are needed.”

Professor Peter Höppe, Head of Munich Re's Geo Risks Research unit, said that, “these two catastrophes clearly demonstrate the type of events we can expect to contend with more often in the future.

With no apparent prospect of progress in international climate negotiations like those held recently in Doha, adaptation to such hazards using suitable protective measures is absolutely essential.”

As high as the global losses were in 2012 they were still less than 2011 when the cost hit as high as $400 billion due to major earthquakes in Japan and New Zealand and severe floods in Thailand.

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JeremyWS's picture

Can't we just mint a coin for it?

Drachma's picture

Let's go for $160 trillion in 'natural' disasters, then we can book it as a global GDP victory. All problems solved, he said with a sarcastic grin.

Kitler's picture

Professor Peter Höppe, Head of Munich Re's Geo Risks Research unit, said that, “these two catastrophes clearly demonstrate the type of events we can expect to contend with more often in the future.

Leaked temperature graph from IPCC AR5 report. Notice something unusual about global temperature versus global warming projection scenarios over the last 14 years?

And solar flux (a proxy for solar energy output exclusive of TSI) has been extremely weak over the last couple of years.

Meanwhile the global warming created drought of 2012 was almost as bad as the drought of the 1930's.


knukles's picture

Global warming makes broken windows.
Root for Alien Invasions.
Platinum Theory of Reality
Paul Krugman 2016


By the Way, Paulziewalzie... 
If you can mint Platinum coins why should we pay taxes?

Gotacha, motherfucker!

fuu's picture

Ben monetizes more in 60 days than natural disasters cost the species over an entire year?

I'm praying for tidal waves...

insanelysane's picture

Good thing we measure the disasters impact by how much iCrap is destroyed as opposed to how many lives are lost.

Sophist Economicus's picture

Half hour's work in the FED's print shop

butchee's picture

Correction:  Added $160 billion in GDP....Get with the program CK.


NotApplicable's picture

And the glaziers wept openly at their good fortune.

knukles's picture

The Heavens Sang Praise of Krugman.


Er, no, there's no God said Paul, so no acolade that big

lolmao500's picture

Krugman : WE NEED MOAR natural disasters!

He might get his wish with Cascadia going off... the latest big earthquake in BC was right on the Cascadia subduction line... Cascadia might be next... and when it happens, half the western coast will wiped out and it'll cost probably a few trillions to fix it all. Not to mention all those people dying... reducing the supply of workers, raising wages!

All very bullish!

Manthong's picture

Maybe, but just think of how many windows Krugman would have to glaze if Cumbre Viejo slipped.

knukles's picture

Why everything is just fine with that report... from CNN sourcing Wikipedia...

Probably ghost written by Piers Morgan when he was at the Daily Mail...


mrktwtch2's picture

good.. they actually have to pay some is like selling puts 8 out of 10 times you keep the premium but some times you have to pay..still a profitable buisness model ..selling on

NotApplicable's picture

Why don't you just hold a big sign that says, "I don't understand the value of hedging risk, OR the value of actuarial analysis which allows for the sustainable selling of protection!"?

Nope, it must be a scam.

Cognitive Dissonance's picture

Still waiting on that alien invasion.

NotApplicable's picture

Every night, I go out and look for the mothership, only to wonder, just why have I been left in this hostile environment for yet another day?

Did I do something wrong to deserve this?

Cognitive Dissonance's picture

Mrs. Cog and I are very angry we've been abandoned for dead on this God forsaken mud ball.

<However this thing the Earthlings call sex is pretty neat. Great way to pass the time while we wait.>

sansnobel's picture

No it's not "cost".  To the crazy people running the world it is a Stimulus and and a booster shot in the arm of the world economy.  You see people, now that we have have a full blown Orwellian system 2+2 now equals 5 Trillion or whatever they decide it equals today.  2 steps forward and 8 steps back is "progress" because energy was expended.

ShrNfr's picture

Ah yes, a broken window on reality it is.

alien-IQ's picture

Not sure how they arrived at hurricane Sandy being the biggest hurricane on record. Hurricane Andrew, which hit South Florida in 1992, was a legitimate category 5 with winds of up to 200 mph.

As far as the damage costs...I would largely attribute the rising damage costs of natural disasters to inflation and/or a weaker dollar but not so much in total damage (as in number of lives affected or homes destroyed).

ShrNfr's picture

Visit the assholes and idiots in NJ sometime. Despite having things built close to the ocean being swept out to sea for 100s of years, they insist that some small insignificant seawall will hold it back the next time. It never has, it never will, and it sure didn't. What I am waiting for is the subway flooding when a real storm surge hits. All the people taking shelter down there are expected to drown.

emersonreturn's picture

alien-IQ, i agree, points well taken.  i wonder though, given global warming and eco damage mixed with increased wealth and excess in the developing world if it might be a good long play to short insurance companies, or are they insulated and protected by an attachment to TPTB that allow them to effectively discard their losses and bask in the warmth and security of Control P?

ShrNfr's picture

What fucking global warming? The global temperature is more or less unchanged since 1998 and is starting to roll over with the AMO cycle. The only warming is in cities where people dump heat from buildings. Oh, and the sunspot cycle is going to shit at the moment.

Flakmeister's picture

Hangin' out at WUWT I see...

I can tell that I would never trust you to do any quantitative task honestly...

NotApplicable's picture

"Biggest" as in largest storm surge over the largest area. Andrew, while more powerful, affected a smaller area.

Element's picture

Re-writing hystery, read 1984 and all will become clear. ;)

salvadordaly's picture

Somehow Barry has to be offended by this. I think he is the biggest natural disaster to hit the US ever.


Dr. Engali's picture

$160 billion? Pfffffffttt....Ben probably has $160 billion stashed in a closet someplace.

NotApplicable's picture

At worst, he has to push a button, like what... 16 times?

Dr. Engali's picture

The Bernank has people who takes care of the mundane tasks for him.

NotApplicable's picture

Oh yeah, I forgot, he's an academic. No calluses for him.

whoopsing's picture

pales in comparison to what was pilfered this year

pods's picture

That's it, we need MOAR laws to stop these hurricanes!

Paging Senator Feinstein...........


Dr. Engali's picture

I'm sure the forthcoming climate change legislation will lower the seas and calm the skies. 

SheepDog-One's picture

So? Just call Bernank for a check!

jonan's picture

"GUEST POST: HAARP Cost the World $160 Billion in 2012"

savagegoose's picture

wait till inflation hits,  less damage will cause $320 billion  damage

TerminalDebt's picture

160B is nothing

Uncle Tim is making a single coin thats worth 1Trillion

magne13's picture

Cost who 160bln? between otc weather derivatives, energy futures who is really paying.  maybe they need to stop skim coating our skies with aluminum and barium to control weather.  I mean does anyone wonder why when you fly its always white below? wake up drones

conspicio's picture

Let's get it straight here...the storms and earthquakes cost nothing. The redistribution of wealth following a disaster is what assigns value and cost. Disaster redistribution is loaded with pork, cronyism, and fraud. Promises and deals have been made and sealed. Rather than hardening the infrastructure (whoa, what a novel idea?) and upgrading coastal areas for future damage, the redistibutionists will slide the wealth out for the masses to spend away into oblivion like a thousand monkeys on typewriters.

Lather, rinse, and repeat. Crises like these can be very profitable if you pick it right and your HFTs are connected with good algorithims...

Smuckers's picture

In a few years, a fender-bender on the I-95 might cost more.


Bicycle Repairman's picture

Don't we have AlGore working on this?  Maybe if Biden also put his shoulder to the wheel.

Papasmurf's picture

Insurance companies have nothing to worry about.  Taxpayers have their back.

tickhound's picture

Storms cost?  These are growth gems, you kidding me?  Just like nationwide flu epidemics.

Roandavid's picture

if Munich Re thinks Sandy cost 50 billion, how come the senate and Govs Cuomo and Christy think the fully accounted for disaster relief package should cost 60 Bill?

Just axin.

gaoptimize's picture

0.25% of $64T World Gross Product.  Cheap at twice the price.  A small fraction of the cost of war and disease.

Bansters-in-my- feces's picture

Seems like HAARP and S.A.G are paying off.

Someone anyways.


Sure wish I owned Weather Central like the Rothschilds.