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

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Submitted by Charles Kennedy of OilPrice.com

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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Tue, 01/08/2013 - 15:12 | 3133707 JeremyWS
JeremyWS's picture

Can't we just mint a coin for it?

Tue, 01/08/2013 - 15:51 | 3133824 Drachma
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.

Tue, 01/08/2013 - 16:10 | 3133827 Kitler
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?

http://www.google.ca/imgres?imgurl=http://wattsupwiththat.files.wordpres...

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

http://www.swpc.noaa.gov/SolarCycle/f10.gif

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

Hmmm.

Tue, 01/08/2013 - 16:14 | 3133897 knukles
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!

Tue, 01/08/2013 - 16:43 | 3134013 fuu
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...

Tue, 01/08/2013 - 16:35 | 3133979 insanelysane
insanelysane's picture

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

Tue, 01/08/2013 - 15:15 | 3133720 Sophist Economicus
Sophist Economicus's picture

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

Tue, 01/08/2013 - 15:16 | 3133725 butchee
butchee's picture

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

 

Tue, 01/08/2013 - 15:30 | 3133760 NotApplicable
NotApplicable's picture

And the glaziers wept openly at their good fortune.

Tue, 01/08/2013 - 16:15 | 3133902 knukles
knukles's picture

The Heavens Sang Praise of Krugman.

 

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

Tue, 01/08/2013 - 15:16 | 3133727 lolmao500
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!

Tue, 01/08/2013 - 15:51 | 3133791 Manthong
Manthong's picture

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

http://ireport.cnn.com/docs/DOC-572259 

http://www.youtube.com/watch?v=ohNsKV3FYT8&feature=player_embedded

Tue, 01/08/2013 - 16:22 | 3133928 knukles
knukles's picture

LOL
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...

:)

Tue, 01/08/2013 - 15:18 | 3133729 mrktwtch2
mrktwtch2's picture

good.. they actually have to pay some claims..insurance 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 fear..lol

Tue, 01/08/2013 - 15:39 | 3133781 NotApplicable
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.

Tue, 01/08/2013 - 15:19 | 3133732 Cognitive Dissonance
Cognitive Dissonance's picture

Still waiting on that alien invasion.

Tue, 01/08/2013 - 15:41 | 3133792 NotApplicable
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?

Tue, 01/08/2013 - 16:14 | 3133896 Cognitive Dissonance
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.>

Tue, 01/08/2013 - 16:17 | 3133904 Papasmurf
Papasmurf's picture

Others have the same idea:

https://www.youtube.com/watch?v=cqDmS3-zGTg

Tue, 01/08/2013 - 15:20 | 3133736 sansnobel
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.

Tue, 01/08/2013 - 15:22 | 3133743 ShrNfr
ShrNfr's picture

Ah yes, a broken window on reality it is.

Tue, 01/08/2013 - 15:22 | 3133742 alien-IQ
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).

Tue, 01/08/2013 - 15:25 | 3133751 ShrNfr
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.

Tue, 01/08/2013 - 15:32 | 3133769 emersonreturn
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?

Tue, 01/08/2013 - 15:56 | 3133833 ShrNfr
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.

Wed, 01/09/2013 - 09:12 | 3135859 Flakmeister
Flakmeister's picture

Hangin' out at WUWT I see...

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

Tue, 01/08/2013 - 15:33 | 3133773 NotApplicable
NotApplicable's picture

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

Wed, 01/09/2013 - 07:55 | 3135752 Element
Element's picture

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

Tue, 01/08/2013 - 15:25 | 3133752 salvadordaly
salvadordaly's picture

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

 

Tue, 01/08/2013 - 15:30 | 3133756 Dr. Engali
Dr. Engali's picture

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

Tue, 01/08/2013 - 15:38 | 3133785 NotApplicable
NotApplicable's picture

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

Tue, 01/08/2013 - 15:43 | 3133789 Dr. Engali
Dr. Engali's picture

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

Tue, 01/08/2013 - 15:43 | 3133800 NotApplicable
NotApplicable's picture

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

Tue, 01/08/2013 - 15:30 | 3133762 whoopsing
whoopsing's picture

pales in comparison to what was pilfered this year

Tue, 01/08/2013 - 15:31 | 3133766 pods
pods's picture

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

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

pods

Tue, 01/08/2013 - 15:34 | 3133776 Dr. Engali
Dr. Engali's picture

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

Tue, 01/08/2013 - 15:34 | 3133775 SheepDog-One
SheepDog-One's picture

So? Just call Bernank for a check!

Tue, 01/08/2013 - 15:41 | 3133793 jonan
jonan's picture

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

Tue, 01/08/2013 - 15:46 | 3133810 savagegoose
savagegoose's picture

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

Tue, 01/08/2013 - 15:49 | 3133819 TerminalDebt
TerminalDebt's picture

160B is nothing

Uncle Tim is making a single coin thats worth 1Trillion

Tue, 01/08/2013 - 15:55 | 3133832 magne13
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

Tue, 01/08/2013 - 15:58 | 3133848 conspicio
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...

Tue, 01/08/2013 - 15:59 | 3133850 Smuckers
Smuckers's picture

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

 

Tue, 01/08/2013 - 16:02 | 3133865 Bicycle Repairman
Bicycle Repairman's picture

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

Tue, 01/08/2013 - 16:18 | 3133911 Papasmurf
Papasmurf's picture

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

Tue, 01/08/2013 - 16:20 | 3133923 tickhound
tickhound's picture

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

Tue, 01/08/2013 - 16:24 | 3133940 Roandavid
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.

Tue, 01/08/2013 - 17:17 | 3134118 gaoptimize
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.

Tue, 01/08/2013 - 17:16 | 3134122 Bansters-in-my-...
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.

Wed, 01/09/2013 - 09:13 | 3135864 Flakmeister
Flakmeister's picture

Don;t bogart that buddy...

Tue, 01/08/2013 - 17:33 | 3134169 Bansters-in-my-...
Bansters-in-my- feces's picture

Stop Chemtrail spraying DAILY and turn OFF HAARP and maybe things would change for the better.

Whoda thunk it...???

 

Ps...For real the rothschilds bought into a little gem called Weather Central....google it on up.

Funny they would be so eager to tell you and all the news channels what the weather is going to be...

Seems like they (rothschilds) like things with the word "Central"

See the theme...?

Tue, 01/08/2013 - 21:09 | 3134667 Jack Burton
Jack Burton's picture

Natural disasters? Bullshit! There are no sunspot caused hurricanes. It is cosimic rays which are cooling the earth and causing record cold in Easten Europe. The solar output  in the southern hemisphere is causing the minor heat wave in Australia which some liberals down under claim causes wild fires when we all know that wild fires are a natural cycle down under and Australia has not warmed since 1998, in fact some say Australia is cooling rapidly due to lack of sun spots and the great expansion of antartic sea ice that is tipping the globe on it's side and cause more solar radiation to fall on the high arctic which melted the ice this summer but this has now refrozen again which just goes to show you that the arctic thaws and freezes every year as the seasons change. The Northwest passage only opened three times in the last decade, whereas during the Medieval warm period Vikings grew orange in Greenland and pinapples in Iceland while the British had grape crops superior to the best in France.

So no, insurance companies need to manage risk, but the risk is of blizzards and great freeze events as sun spots return and cause a new little ice age. Hurricanes are about to decrease in frequency and size with the cooling of the seas and the drop in sea levels as the north freezes again due to the last 14 years of global cooling.

Hurricane Sandy was just one of hundreds of such hurricanes that hit New Jersey and New York since the time Indians owned the place. The drought in the US Mid West is not as bad as the one in the 1930's so farmers should stop bitching and prepare for rain and cold that will appear in 2013. The Mississippi River is not nearly as low as it was in the 1920's showing that this drought is mild and part of the natural drought cycle.

Insurance companies will experience higher profits as the cooling earth results in less energy in the atmosphere. This results in less frequent extreme weather events and will lowers the risk profile of the policies companies have in effect. Thus, go long insureres.

ANy questions?

Wed, 01/09/2013 - 07:49 | 3135745 Element
Element's picture

The 'heat wave' is south-west and south-central oz. I'm on the east coast at the moment and it has been a very pleasant spring and summer, so far, one of the nicest for years in fact. I haven't even needed the air-con yet!

In oz labor-green politics are so gung-ho to justify the carbon-tax, via a way over-played sense of 'man-induced' disaster. Plus the opposition has sworn to remove the tax if they win the election this year. So it's politicized rubbish and every hot day or minor grass fire is reported as a major event. It is likely we will see more serious fires and heat this week though.

But that has been the pattern all my life. Heat, fires, insanely excessive media-hype and political-grandstanding. 2002 was memorably hot year and caused a major coral-bleaching event and we had serious heat and drought for several years either side.

Truth is though, we have just experienced the two coolest wettest summers recorded from mid 2010 through to mid-2012, and this was particularly the case in much the same parts of the continent that are now hot. Well, except for the south-west, which remained dry and hot during the whole period.

So now after two years of record rains, and cloudiness, and coolness, and rapid plant and animal growth, and urban and rural encroachment, we have heat and fires again. Who knew?

Wed, 01/09/2013 - 09:08 | 3135846 awakening
awakening's picture

Thanks for putting the point in a better way than I could articulate. My patience fails me when it comes to 'man made' climate change (if it was truly man made then the climate would have been terraformed into something more stable for food production and quality of life, the fact that it changes to natures whim is self-sufficient evidence that it is patently false).

Some Australian culture for ZH:
http://www.dorotheamackellar.com.au/archive/mycountry.htm

Wed, 01/09/2013 - 03:18 | 3135502 yang46
yang46's picture

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Wed, 01/09/2013 - 09:09 | 3135850 awakening
awakening's picture

Attention all spammers, piss off. Thank you for your cooperation.

Wed, 01/09/2013 - 10:03 | 3135867 Flakmeister
Flakmeister's picture

You realize that you "failed" a Turing test...

Thu, 01/10/2013 - 05:22 | 3140054 awakening
awakening's picture

http://www.turinghub.com/

I actually passed, however re my previous post it is still applicable because a human was required to register the account.

Do NOT follow this link or you will be banned from the site!