Climatic Change

, Volume 113, Issue 2, pp 215–237 | Cite as

A trend analysis of normalized insured damage from natural disasters

Article

Abstract

As the world becomes wealthier over time, inflation-adjusted insured damages from natural disasters go up as well. This article analyzes whether there is still a significant upward trend once insured natural disaster loss has been normalized. By scaling up loss from past disasters, normalization adjusts for the fact that a hazard event of equal strength will typically cause more damage nowadays than in past years because of wealth accumulation over time. A trend analysis of normalized insured damage from natural disasters is not only of interest to the insurance industry, but can potentially be useful for attempts at detecting whether there has been an increase in the frequency and/or intensity of natural hazards, whether caused by natural climate variability or anthropogenic climate change. We analyze trends at the global level over the period 1990 to 2008, over the period 1980 to 2008 for West Germany and 1973 to 2008 for the United States. We find no significant trends at the global level, but we detect statistically significant upward trends in normalized insured losses from all non-geophysical disasters as well as from certain specific disaster types in the United States and West Germany.

References

  1. Barredo JI (2009) Normalised flood losses in Europe: 1970–2006. Nat Hazards Earth Syst Sci 9:97–104CrossRefGoogle Scholar
  2. BEA (2010) Regional economic accounts, available at: http://www.bea.gov/regional/index.htm
  3. Botzen WJW, Bouwer LM, van den Bergh JJCJM (2010) Climate change and hailstorm damage: empirical evidence and implications for agriculture and insurance. Resource Energy Econ 32:341–362CrossRefGoogle Scholar
  4. Bouwer LM (2011) Have past disaster losses increased due to anthropogenic climate change? Bull Am Meteorol Soc (forthcoming). doi:10.1175/2010BAMS3092.1
  5. Brooks HE, Doswell CA (2001) Normalized damage from major tornados in the United States: 1890–1999. Weather Forecast 16:168–176CrossRefGoogle Scholar
  6. Cambridge Econometrics (2010) European regional data. Cambridge, UKGoogle Scholar
  7. Changnon SA (2001) Damaging thunderstorm activity in the United States. Bull Am Meteorol Soc 82(4):597–608CrossRefGoogle Scholar
  8. Changnon SA (2003) Shifting economic impacts from weather extremes in the United States: a result of societal changes, not global warming. Nat Hazards 29:273–290CrossRefGoogle Scholar
  9. Changnon SA (2007) Catastrophic winter storms: an escalating problem. Clim Chang 84:131–139CrossRefGoogle Scholar
  10. Changnon SA (2009a) Temporal and spatial distributions of wind storm damages in the United States. Clim Chang 94:473–482CrossRefGoogle Scholar
  11. Changnon SA (2009b) Increasing major hail losses in the U.S. Clim Chang 96:161–166CrossRefGoogle Scholar
  12. Changnon SA, Changnon JM (1992) Storm catastrophes in the United States. Nat Hazard 6:93–107CrossRefGoogle Scholar
  13. Changnon SA, Pielke RA, Changnon D, Sylves RT, Pulwarty R (2000) Human factors explain the increased losses from weather and climate extremes. Bull Am Meteorol Soc 81(3):437–442CrossRefGoogle Scholar
  14. Crompton RP, McAneney KJ (2008) Normalised Australian insured losses from meteorological hazards: 1967–2006. Environ Sci Pol pp. 371–378Google Scholar
  15. D’Adda C, Scorcu AE (2003) On the time stability of the output-capital ratio. Econ Model 20:1175–1189CrossRefGoogle Scholar
  16. Dessens J (1995) Severe convective weather in the context of a nighttime global warming. Geophys Res Lett 22(10):1241–1244CrossRefGoogle Scholar
  17. Downton M, Miller JZB, Pielke RA Jr (2005) Reanalysis of U.S. National Weather Service flood loss database. Nat Hazards Rev 6:13–22CrossRefGoogle Scholar
  18. Elsner JP, Kossin JP, Jagger TH (2008) The increasing intensity of the strongest tropical cyclones. Nature 455:92–95CrossRefGoogle Scholar
  19. IPCC (2007a) Climate change 2007: the physical science basis. Cambridge University Press, New YorkGoogle Scholar
  20. IPCC (2007b) Climate change 2007: impacts, adaptation, and vulnerability. Cambridge University Press, New YorkGoogle Scholar
  21. Karl TR, Meehl GA, Miller CD, Hassol SJ, Waple AM, Murray WL (eds) (2008) Weather and climate extremes in a changing climate. Regions of focus: North America, Hawaii, Caribbean, and U.S. Pacific Islands, Report by the US climate change science program and the subcommittee on global change research, synthesis and assessment product 3.3. http://downloads.climatescience.gov/sap/sap3-3/sap3-3-final-all.pdf
  22. Knutson TR, McBride JL, Chan J, Emanuel K, Holland G, Landsea C, Held I, Kossin JP, Srivastava AK, Sugi M (2010) Tropical cyclones and climate change. Nat Geosci 3:157–163CrossRefGoogle Scholar
  23. Krugman P (1992) Comment. NBER Macroecon Annu 7:54–56CrossRefGoogle Scholar
  24. Kunz M, Sander J, Kottmeier Ch (2009) Recent trends of thunderstorm and hailstorm frequency and their relation to atmospheric characteristics in southwest Germany. Int J Climatol 29:2283–2297CrossRefGoogle Scholar
  25. Miller S, Muir-Wood R, Boissonade A (2008) An exploration of trends in normalized weather-related catastrophe losses. In: Diaz HF, Murnane RJ (eds) Climate extremes and society. Cambridge University Press, New York, pp 225–247CrossRefGoogle Scholar
  26. Min S-K, Zhang X, Zwiers FW, Hegerl GC (2011) Human contribution to more-intense precipitation extremes. Nature 470:378–381CrossRefGoogle Scholar
  27. Neumayer E, Barthel F (2011) Normalizing economic loss from natural disasters: a global analysis. Global Environ Change 21(1):13–24. doi:10.1016/j.gloenvcha.2010.10.004 CrossRefGoogle Scholar
  28. NHGIS (2010) Census of population and housing 1970–2010, available at: http://data.nhgis.org/nhgis/
  29. Nordhaus WD (2010) The economics of hurricanes and implications of global warming. Clim Chang Econ 1:1–20CrossRefGoogle Scholar
  30. Pall P, Aina T, Stone DA, Stott PA, Nozawa T, Hilberts AGJ, Lohmann D, Allen MR (2011) Anthropogenic greenhouse gas contribution to flood risk in England and Wales in autumn 2000. Nature 470:382–385CrossRefGoogle Scholar
  31. Peterson TC, Zhang X, Brunet-India M, Vázquez-Aguirre JL (2008) Changes in North American extremes derived from daily weather data. J Geophys Res 113:D07113CrossRefGoogle Scholar
  32. Pielke RA Jr., Landsea CW (1998) Normalized hurricane damages in the United States: 1925–1995. Weather Forecast Sept. 1998, pp. 621–631Google Scholar
  33. Pielke RA Jr, Landsea CW, Musulin RT, Downton M (1999) Evaluation of catastrophe models using a normalized historical record. J Insur Regul 18(2):177–194Google Scholar
  34. Pielke RA Jr, Rubiera J, Landsea C, Fernández ML, Klein R (2003) Hurricane vulnerability in Latin America and the Caribbean: normalized damages and loss potentials. Nat Hazards Rev 4(3):101–114CrossRefGoogle Scholar
  35. Pielke RA Jr, Gratz J, Landsea CW, Collins D, Saunders MA, Musulin R (2008) Normalized hurricane damages in the United States: 1900–2005. Nat Hazards Rev 9(1):29–42CrossRefGoogle Scholar
  36. Raghavan S, Rajseh S (2003) Trends in tropical cyclone impact: a study in Andhra Pradesh, India. Am Meteorol Soc 84:635–644CrossRefGoogle Scholar
  37. Schiesser, H-H (2003) Hagel. In: Extremereignisse und Klimaänderung. Bern: Organe consultatif sur les changements climatiques (OcCC). pp. 65–68. Bern. http://www.proclim.ch/4dcgi/occc/fr/Report?859
  38. Schmidt S, Kemfert C, Höppe P (2009) Tropical cyclone losses in the USA and the impact of climate change—A trend analysis based on data from a new approach to adjusting storm losses. Environ Impact Assess Rev 29:359–369CrossRefGoogle Scholar
  39. Schwab AK, Eschelbach K, Brower DJ (2007) Hazard mitigation and preparedness. Wiley, HobokenGoogle Scholar
  40. Trapp RJ, Diffenbaugh NS, Brooks HE, Baldwin ME, Robinson ED, Pal JS (2007) Changes in severe thunderstorm environment frequency during the 21st century caused by anthropogenically enhanced global radiative forcing. Proc Natl Acad Sci U S A 104:19719–19723CrossRefGoogle Scholar
  41. Trapp RJ, Diffenbaugh NS, Gluhovsky A (2009) Transient response of severe thunderstorm forcing to elevated greenhouse gas concentrations. Geophys Res Lett 36:L01703CrossRefGoogle Scholar
  42. UNCTAD (2005) Trade and development aspects of insurance services and regulatory frameworks. Geneva: UNCTAD; available at http://www.unctad.org/en/docs/ditctncd200515_en.pdf
  43. US Census Bureau (2010a) Population estimates: housing units, available at: http://www.census.gov/popest/housing/
  44. US Census Bureau (2010b) Historical census of housing tables: home values, available at: http://www.census.gov/hhes/www/housing/census/historic/values.html
  45. Vranes K, Pielke R Jr (2009) Normalized earthquake damage and fatalities in the United States: 1900–2005. Nat Hazards Rev 10(3):84–101CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media B.V. 2011

Authors and Affiliations

  1. 1.Department of Geography and Environment and The Grantham Research Institute on Climate Change and the EnvironmentLondon School of Economics and Political ScienceLondonUK

Personalised recommendations