Insurance companies warn global warming will cost $70 billion annually.

• Author: Dhar, Arunima
• Position: Environmental Intelligence

Natural disasters in 2002 may cost more than $70 billion, according to Germany-based Munich Re, one of the world's largest insurance companies. Company experts attending UN talks on climate change in New Delhi, India, in October 2002, attributed the vast majority of the damages to climate change. As of September, natural disasters had cost countries and communities an estimated $56 billion.

In a separate report, the UN Environment Programme (UNEP) estimated that in the next decade losses from climate would reach close to $150 billion, if current trends continue. The report, "Climate Change and the Financial Services Industry," calculated that losses due to natural disasters appear to be doubling every decade and in the past 15 years add up to $1 trillion.

"Climate change, linked with human-made emissions, is already underway," said Klaus Toepfer, head of the UNEP. "The world is facing a rise in extreme weather--events of the kind witnessed in 2002--that will impact on every facet of life including agriculture, health, water supplies, and wildlife." The floods in Europe in August 2002, the worst in 150 years, incurred insured losses amounting to $5 billion. Typhoon Rusa, which hit South Korea in late August and early September 2002, cost $6.6 billion.

Insurance companies and reinsurance banks are increasingly concerned with the potential effects of global warming. A...