The Role of Scientifi c Modelling and Insurance in Providing Innovative Solutions for Managing the Risk of Natural Disasters - Reducing Disaster: Early Warning Systems for Climate Change - page 316

17.1 Introduction

Economic losses from disasters have exceeded $100 billion for 3 years in a row, the
fi rst time this has happened, according to the UN Offi ce for Disaster Risk Reduction
(UNISDR 2013 ). These high losses are due to an increase in the exposure of indus-
trial assets and private property to disasters. According to Swiss Re, natural catas-
trophes and man-made disasters claimed approximately 14,000 lives and resulted in
economic losses of about $186 billion in 2012 (SwissRe 2013 ). The cost to insurers
was over $77 billion, making 2012 the third-highest year since 1970. Of the 318
catastrophic events that occurred in 2012, 168 were natural catastrophes and 150
were man-made disasters. Insurance can provide fi nancial relief for those experi-
encing catastrophic losses. There remain large parts of the world that are currently
exposed to severe weather events without insurance protection. Eliminating under-
insurance could help to increase risk-preparedness.
The destructions caused by earthquakes in Japan and New Zealand and wind-
storms and fl ooding in the USA, Australia and Thailand were stark reminders of
the power of natural disasters. Extreme weather events make headlines and are
directly damaging. However, just as damaging are unpredictable weather patterns,
which are making rainfall and temperature increasingly variable and adversely
impact agriculture, food supply, shelter and people's livelihoods (self-sustainability)
globally.
Combined with this, several other factors will infl uence the society's future. The
world population is projected to rise to nine billion by 2050 (UN 2010 ), with the
number living in urban areas rising from the 50 % today to 69 %. Population distri-
bution is changing. Populations are concentrated in coastal and urban areas (UN
2011 ), increasing the exposure to natural disasters. Growing concentrations of peo-
ple in megacities means that if disaster strikes, many people are likely to be affected.
Furthermore, living on the coast increases exposure to hurricanes making landfall,
storm surge and sea-level rise.
This rapid population growth, combined with the ascent of developing nations to
Western living standards, will place immense pressure on food, water and energy
supplies in a world where the fi nite amounts of these resources are already strained.
At present, 925 million people experience hunger, with recent food price spikes and
volatility threatening the sustainability of global food security, particularly in devel-
oping countries where insurance is inaccessible to the majority of poor farmers
(Foresight 2011 ). Around 2.5 billion people live without adequate sanitation, and
almost 900 million people do not have access to safe drinking water (WHO 2012 ).
More than 1.3 billion people, 20 % of the world's population, do not have access to
electricity (IEA 2011 ). Worldwide consumption of energy is forecast to increase by
53 % from 2008 to 2035 (EIA 2011 ).
As supply fails to meet demand, security of water, food and energy is intensify-
ing in a global competition for resources. The revolutionary wave of protests, riots
and civil wars in the Middle East, which started at the end of 2010, shows that the
interconnectedness of our globalised economy is also presenting new challenges.