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Economic growth feeds catastrophe losses

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Allianz insurance researchers say a seven-fold increase in catastrophe losses since the 1970s is the result of increasing global economic growth and climate change.

The company says in a new report on natural catastrophe risk that climate and weather-related costs have jumped dramatically in the past 40 years.

Average insured losses in the 1970s and ’80s for these kinds of events jumped from less than $US5 billion ($4.8 billion) to more than $US40 billion ($38.7 billion) in 2010.

Allianz SE board member Clem Booth says “terrible events” like the Japan and NZ earthquakes illustrate the value and importance of insurance in society.

The company’s research say the main factor for these increased losses is economic growth due to growing property values and popularity density expansions.

Allianz Climate Solutions CEO Armin Sandhövel says insurance density in these areas is also on the rise.

“There is also a link between human activity and climate change, which will have an impact on storm volatility, flood activity and on water levels and coastal regions,” he said.

“Allianz is following all the factors that lead to increased claims from natural catastrophes very closely.”

The report also says Asia has a much higher risk of catastrophe events than the US and stands “to lose much more from natural disasters as further urbanisation occurs”.

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