Predicting Disaster, Managing Losses

Transcription

1 Predicting Disaster, Managing Losses Thomas R. Loster GeoRisks Research, Munich Re Head of Weather/Climate Risks Research Finance, Environment and Sustainable Development Corporate Responsibility and Capital Markets Managing Qualitative Risk Issues Paris Münchener Rück Munich Re Group

2 Contents Loss trends Changing risks Tasks (homework) Environment and sustainability

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5 Great natural catastrophes >167 bn US$ Economic losses (2001 values ) of which insured losses (2001 values ) Trend of economic losses 60 Trend of insured losses 50 US$ bn GeoRisks Research Dept., Munich Re

6 Great Weather Disasters Decade comparison Decade Decade Decade Decade Decade last 10 Factor last 10:60s Number Economic losses Insured losses Losses in US$ billion values MRNatCatSERVICE 2002 GeoRisks Research Dept., Munich Re

7 The heat is on

8 The present problems will be strongly aggravated if the climatic change predictions come true Increase in greenhouse gases temperature air/sea humidity sea level windstorms/storm surges thunderstorms/hailstorms rainstorms/floods crop hazards Another problem ozone "hole" skin cancer biosphere damage

9 More extreme events in a warmer climate Example: heat waves normal warmer climate extreme very cold cold normal warm hot extreme cold normal warm hot extreme very extreme

10 A few recent weather related disasters Selected events (focus France, Germany) Region Event Date Remark France (N) Rain, Floods April/May 2001 worst since 1926 Germany Severe storms May South: 140 mm/24 hrs Germany Severe storms July 2002 record winds, rain Germany Rain, Floods August 2002 RP > 150 years Austria Rain, Floods August 2002 RP > 150 years Czech Rep. Rain, Floods August 2002 RP > 100 years Spain Rain, floods March/Ap mm/3 hours France (S) Rain, Floods September 2002 annual prec. in 36 hrs. France, Germany Windstorm Jeanett October 2002 large area France, Europe Storm, Rain, Floods January 2003 widespread over Europe Events started to become more extreme!

11 To Do

12 Windfield Storm Lothar Münchener Rück Finance, Munich Environment Re Group and Sustainable Development Paris, 10 th January 2003 no data

13 Hail Munich

14 Computer techniques Overlaying and calculating buildings values land use storm tracks flood levels sums insured etc.

15 Loss Potentials of Selected Natural Disaster Scenarios Scenario Return period Economic loss Insured loss (1x in... years) (US$ bn) (US$ bn) Windstorm USA Earthquake USA Windstorm Europe Windstorm Japan Earthquake Japan Munich Re 2003

16 Insurance Tools Adequate pricing Substantial deductibles, based on the respective exposure Loss prevention Accumulation control Improved claims settlement Reinsurance, retrocession Liability limits Exclusion of certain hazards Exclusion of particularly exposed areas

17 Lothar Prestige

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20 Environmental Issues and Sustainability Environmental conditions Meet the Expectations of the Stakeholders Shareholders Clients Rating Agencies Public Interest, Reputation Employees

21 Environmental Issues and Sustainability Important tasks (homework) Loss potentials analyses (incl. trends) Insurance tools (e.g. adequate premiums) Asset Management (DJSI, FTSE4Good etc.) Housekeeping (Certification etc.) Real Estate Management Education

22 Kyoto Protocol Support Insuring the Mechanisms Products can include: - Business Interuptions - Forest-/Agriculture projects (CO 2 sinks, yield) - Buffer Insolvencies etc. (credit insurance, surety bonds etc.) - Projects Financing (more an issue for banks) - Others (Consulting, Trading, CO 2 Banking etc.) What we need: => long-term political certainty on regulations (political risks) => clear values for GHG emission reductions (business plans) => active CDM-, JI-, ET World (spread portfolios) => strong rules and regulations (=> compliance regime) => good global consensus is an important prerequisite!

23 Thank you questions??