A Trend Analysis of Normalized Insured Damage from Natural Disasters

Climatic Change, 113 (2), 2012, pp. 215-237

56 Pages Posted: 6 May 2011 Last revised: 24 Jun 2013

Fabian Barthel

London School of Economics & Political Science (LSE)

Eric Neumayer

London School of Economics and Political Science (LSE)

Date Written: May 4, 2011

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.

Suggested Citation

Barthel, Fabian and Neumayer, Eric, A Trend Analysis of Normalized Insured Damage from Natural Disasters (May 4, 2011). Climatic Change, 113 (2), 2012, pp. 215-237. Available at SSRN: https://ssrn.com/abstract=1831633

Fabian Barthel (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

HOME PAGE: http://personal.lse.ac.uk/barthel

Eric Neumayer

London School of Economics and Political Science (LSE) ( email )

Houghton Street
WC2A 2AE London
United Kingdom
+44 207 955 7598 (Phone)
+44 207 955 7412 (Fax)

HOME PAGE: http://personal.lse.ac.uk/neumayer

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