Disaster Planning Takes Back Seat to Debt Crisis, Allianz Says
Preparation for natural disasters such as storms and floods have “taken a back seat” among politicians and the public amid the European debt crisis, according to Allianz SE (ALV), Europe’s biggest insurer.
“Due to the broad public discussion of the debt crisis and a so far relatively mild catastrophe loss year in 2012, climate change and natural catastrophes have again taken a back seat on the political and public agenda,” Amer Ahmed, chief executive officer of Allianz Re, Allianz’s reinsurance arm, said in an e- mailed statement today.
Allianz said it expects the “frequency and severity” of weather-related events to increase and more lives and property are at risk as people move to coastal areas. Hurricane Sandy, which slammed into New York and New Jersey last week and killed more than 100 people, may cost insurers and the reinsurers, who take parts of their risks in return for a share of the premiums, $10 billion to $20 billion, according to an estimate by Eqecat Inc., a provider of catastrophic risk models.
“We have to increase our efforts to implement mitigation measures together with the public sector to be prepared for increasing storm, heavy rain and hail activity,” Ahmed said.
Payouts to customers for weather-based insurance losses have risen 15-fold in the past 30 years, Allianz said. It’s increasingly the case that natural catastrophes such as last year’s flooding in Thailand result in worldwide chain reactions due to supply chain disruptions at global companies, the insurer said.
The insurance industry and government-funded insurance programs paid out a record $105 billion of natural-disaster claims in 2011 for events including the earthquake and tsunami that hit Japan and floods in Thailand.
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