Extreme Vulnerability

As the dust settled, it became apparent that 2017 was one for the records.  Unfortunately, natural catastrophes were what set many of the records.  According to Munich Re (a reinsurer), insured disasters globally reached an all-time high cost of $135 billion., nearly three times higher than the annual average of $49 billion.  Sadly, this figure covers just 41 percent of the total losses caused by adverse natural events.  The sum of all such losses incurred in 2017 (whether insured or not), actually totaled $330 billion, nearly two times higher than the inflation-adjusted $170 billion ten-year average.

While weather-related disasters set a new record for losses, the total number of natural disasters hit 710, a significant jump from the average of 605 disasters.  This includes events like earthquakes, tsunamis, and volcanoes.  Approximately 10,000 people died in natural disasters; interestingly and fortunately, this is substantially less than the ten-year average of 60,000 lives lost.

America was hit particularly hard last year.  On average, our nation accounts for just 32 percent of insured losses, but this figure hit 50 percent in 2017.  Broadening the borders to include Canada and Mexico, North America accounted for 83 percent of the global total.

Scarily, Munich Re expects more of the same in the years ahead.  Their experts’ models anticipate extreme weather events to occur more frequently in the future.  In fact, they argue there is no end in sight as records for global mean annual temperatures should continue to be broken regularly.

All of us will need to make adjustments if Munich Re’s models are correct.  Local economies have been built around certain parameters, one of which is weather.  For instance, imagine how daily output would be negatively impacted if suddenly snow started falling in the lower elevations of Southern California; we already struggle to drive when it rains.  Structural changes in weather will necessitate acclimation by businesses, consumers, and the government.  Even here in the U.S., we may begin to see population migrations, crop disruptions, and unplanned budgetary outlays.  Stay tuned, climatologists may start leading off nightly business reports.