Climate Extremes and Society: An exploration of trends in normalized weather-related catastrophe losses

Condensed summary In order to evaluate potential trends in global natural catastrophe losses, it is important to compensate for changes in asset values and exposures over time. We create a Global Normalized Catastrophe Catalogue covering weather-related catastrophe losses in the principal developed (Australia, Canada, Europe, Japan, South Korea, United States) and developing (Caribbean, Central America, China, India, the Philippines) regions of the world. We survey losses from 1950 through 2005, although data availability means that for many regions the record is incomplete for the period before the 1970s even for the largest events. After 1970, when the global record becomes more comprehensive, we find evidence of an annual upward trend for normalized losses of 2% per year. Conclusions are heavily weighted by US losses, and their removal eliminates any statistically significant trend. Large events, such as Hurricane Katrina and China flood losses in the 1990s, also exert a strong impact on trend results. In addition, once national losses are further normalized relative to per capita wealth, the significance of the post-1970 global trend disappears. We find insufficient evidence to claim a statistical relationship between global temperature increase and normalized catastrophe losses. Introduction Economic losses attributed to natural disasters have increased from US$75.5 billion in the 1960s to US$659.9 billion in the 1990s (United Nations Development Programme [UNDP], 2004), for an annual growth rate of approximately 8%. Private sector data also show rising insured losses over a similar period (Munich Re, 2001; Swiss Re, 2005).