A trend analysis of normalized insured damage from natural disasters
AbstractAs 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 disaster 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 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 nongeophysical disasters as well as from certain specific disaster types in the United States and Germany.
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Bibliographic InfoPaper provided by Grantham Research Institute on Climate Change and the Environment in its series Grantham Research Institute on Climate Change and the Environment Working Papers with number 30.
Date of creation: Nov 2010
Date of revision:
Other versions of this item:
- Fabian Barthel & Eric Neumayer, 2012. "A trend analysis of normalized insured damage from natural disasters," Climatic Change, Springer, vol. 113(2), pages 215-237, July.
- Fabian Barthel & Eric Neumayer, 2010. "A trend analysis of normalized insured damage from natural disasters," LSE Research Online Documents on Economics 37600, London School of Economics and Political Science, LSE Library.
- G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
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- Silvio Schmidt & Claudia Kemfert & Peter Höppe, 2008. "Tropical Cyclone Losses in the USA and the Impact of Climate Change: A Trend Analysis Based on a New Dataset," Discussion Papers of DIW Berlin 802, DIW Berlin, German Institute for Economic Research.
- Botzen, W.J.W. & Bouwer, L.M. & van den Bergh, J.C.J.M., 2010. "Climate change and hailstorm damage: Empirical evidence and implications for agriculture and insurance," Resource and Energy Economics, Elsevier, vol. 32(3), pages 341-362, August.
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