Insured losses from natural disasters totaled $80 billion worldwide last year, significantly higher than the 30-year average, a report from reinsurance giant Munich RE said.
Earthquakes, floods, tropical cyclones, and two especially devastating wildfires in California all contributed to total economic losses of $160 billion, ranking it among the 10 costliest disaster years and the fourth most expensive for the industry since 1980.
The Camp Fire in California was the most expensive natural disaster of the year for insurers, with insured losses of $12.5 billion and overall losses of $16.5 billion. The Woolsey Fire was fourth on the list, at $4 billion in insured losses ($5.2 billion overall).
U.S. losses from Hurricane Michael in August and Hurricane Florence in October totaled $30 billion. In all, the report said, 800 people in the U.S. lost their lives in natural disasters last year as total losses reached $82 billion.
Globally, natural disasters killed 10,400 people last year, with widespread floods in Asia and Africa accounting for 35% of the total.
The report from Munich RE, a U.S.-based reinsurance company, said that in all, there were 29 events globally that resulted in losses of $1 billion or more each.
“Payouts by the insurance industry helped to boost catastrophe resilience, in other words the ability after a disaster to return to normality as quickly as possible,” the company said.
But insurance is much more likely in industrialized nations than it is in developing nations. A total of 68% of insured losses were in North America, and another 23% in Asia.
“There has been a steadily growing willingness in these countries to take out cover against natural hazards since the 1980s,” the report said. “The situation with insurance protection in emerging and developing countries is quite different, despite the fact that, for financially weak and low-income countries, improving risk management and resilience-building systems is an important way of mitigating the impact of humanitarian disasters and promoting sustainable economic growth.”
In California, disaster aid is threatened
California is in the midst of recovery efforts after the devastating year’s series of wildfires, but President Donald Trump said this week that he intended to cut off federal emergency aid because of the state’s forest management practices.
In a tweet, Trump said, “Unless they get their act together, which is unlikely, I have ordered FEMA to send no more money,” The Washington Post reported. “It is a disgraceful situation in lives & money.”
It wasn’t clear whether the President has already told the Federal Emergency Management Agency to halt payments, or would be doing that at some point in the future. The Post asked FEMA for comment but got an automatic email response to the effect that the government shutdown prevented a reply.
It may be nothing more than bluster, and the president may have no legal authority to withhold money after declaring a national disaster, one former FEMA official said.
Rafael Lemaitre, the former director of public affairs for FEMA in the Obama administration, told The Post, “I am not aware of any mechanism where you can say, ‘I’m undeclaring a state of disaster.’ ”
More than 6,600 people have applied for FEMA aid in California and nearly $49 million in federal assistance has been approved.
The president has been critical of California in the past, citing its “gross mismanagement of the forests” and “bad environmental laws” that were responsible for diverting water that could have been used to combat fires into the Pacific.