Gujarat flood caused Rs 1,500 cr losses

Mumbai, Dec 29 | Updated: Dec 30 2006, 05:30am hrs
While warning the rising damages by the Indian floods, Munich Re, worlds second largest reinsurance company, has estimated that the insured losses in August, mainly incurred in Gujarat, amounted to some $350 million (Rs 1,500 crore).

Major flood losses for the Indian insurance industry illustrate the risks that also accompany rising concentrations of values in emerging markets in the previous year.

The extreme monsoon rains had caused an insured loss of some three-quarters of a billion US dollars to the region around the city of Mumbai the most expensive natural catastrophe that Indias growing insurance industry had ever faced, it said.

Taking stock of global losses in 2006, it said worldwide, some 18,000 people died in 2006 as a result of natural events such as earthquakes, storms or floods in the previous year, more than 1,00,000 lost their lives, primarily in the devastating earthquake that hit Pakistan and India on October 8, 2005.

In 2006, the natural catastrophe, which caused the greatest number of deaths, was again an earthquake. The global insurance industry was largely spared major losses from natural catastrophes in 2006, unlike in the previous two years, when hurricanes such as Katrina caused record losses.

Economic losses up to the end of December totalled $45 bn, around one-fifth of the previous years figure of $219 bn, and insured losses amounted to $15 bn, less than one-sixth of the total in 2005 ($99 bn). This relatively positive outcome can be ascribed to the absence of major hurricanes in the North Atlantic.

Dr Torsten Jeworrek, member of Munich Res board of management, The fact nevertheless remains that, in the longer term, the number of severe weather-related natural catastrophes is set to increase due, among other things, to global warming. Combined with further increasing concentrations of values in exposed areas, this means continually rising loss potentials. Even apparently contradictory events in Europe, such as the huge snow-pressure losses at the beginning of 2006 and the extremely warm start to this winter, with the potential for severe winter storms, fit into this pattern.

High ocean temperatures, up to one degree above the long-term average, had been expected to increase the number of cyclones.

According to World Meteorological Organization estimates, 2006 was the sixth-warmest year ever recorded in terms of air temperature, and it was even the fourth warmest in the northern hemisphere. This means that both globally and for the northern hemisphere, the ten warmest years on record occurred during the period 1995 2006.