Natural disasters are some of the most unpleasant risks that investors must consider due to unpredictability.
But one thing is for sure: the cost of natural disasters is getting a lot more expensive.
“Insured losses from natural disasters have risen eight-fold in economic terms since the 1980’s,” write analysts from Deutsche Bank.
They reviewed the data of the reinsurers — the companies that insure the insurance companies — and created the chart below.
Photo: Deutsche Bank
“Losses can fluctuate wildly from year to year,” they note.
“Freak weather events are occurring more often than can be explained by natural variability alone,” they write. “Rising urbanisation, which increases the concentration of wealth and people, exacerbates the impact of such events.”
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