Page 17 - Turkinsurance Digital Magazine

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There are many reasons for the increase in these events. One of concerns reinsurance markets and insurance companies’ strat-
them is climate change. Climate change is causing an increase egies in disaster management. Türk Reasürans recently took
in the average temperature of the world. This, in turn, leads to a significant step in response to these risks. The Catastrophic
more severe weather events and longer-lasting droughts. Modeling Platform, CatMod, created by Türk Reasürans, will
now enable the better management of all catastrophic risks in
Another reason is human activities. Deforestation, changes in the sector, with a primary focus on earthquakes. After the Kah-
land use, and pollution are increasing the risk of natural disas- ramanmaraş Earthquake, the industry demonstrated successful
ters. performance and played an active role in returning life to nor-
mal. In the event of a potential Marmara earthquake, the sec-
The increasing number of catastrophic events is causing wide- tor will play an important role in quickly compensating for the
spread destruction worldwide. Millions of people are left home- damage that will occur and in addressing the wounds that arise
less, thousands lose their lives, and economies suffer. after the earthquake as swiftly as possible. Furthermore, both
in our country and globally, the insurance sector plays a pivotal
To mitigate the effects of these events, steps need to be taken to role in coping with increasing catastrophic risks such as forest
combat climate change and be prepared for natural disasters. fires, floods, landslides, and more.

Here are some measures that can be taken: Damage is increasing globally as well
- Take steps to reduce greenhouse gas emissions to combat cli- Natural disasters in the first half of 2023 resulted in a global
mate change. economic loss of 194 billion dollars, with only 53 billion dollars
of that being insured. The most devastating natural disaster in
- Protect forests and make land use more sustainable. the first half of the year was the Kahramanmaraş Earthquake,
Reduce pollution. which claimed the lives of over 50,000 people.

- Improve early warning systems and implement education pro- According to a report by Aon, global economic losses from nat-
grams to be prepared for natural disasters. ural disasters in the first half of 2023 significantly exceeded
the 21st-century average, reaching 194 billion dollars. These
The risk is increasing every year losses rank as the fifth-highest recorded in the report, and this
As global temperatures continue to rise due to climate change, year’s losses already account for 60% of the global annual av-
statistics also indicate a worldwide increase in the number of erage economic losses. The report also indicated that global
severe weather events. Many studies show that the most promi- losses are expected to further increase for the entire year. In the
nent consequence of rising global temperatures is an increase in first half of 2023, there were 25 different disasters worldwide
the number of weather events such as floods, storms, droughts, that resulted in an economic loss of 194 billion dollars. All of
and extreme temperatures. these events, except for one, were related to weather condi-
tions. Out of the disasters recorded in 2023, 17 occurred in the
Many studies indicate that the most pronounced consequence United States, followed by Asia-Pacific (4), EMEA (3), and
of rising global temperatures is an increase in the number of the Americas. Global insured losses from natural disasters in
weather events such as floods, storms, droughts, and extreme the first half of 2023 amounted to 53 billion dollars, which is
temperatures. According to data from the World Meteorolog- 46% above the 21st-century average and 25% above the 10-
ical Organization (WMO), climate or water-related disasters year average. This also marks the fourth-highest first half-year
have caused an average of 115 deaths per day and an average period on record, following 2011, 2021, and 2022. Similar to
of 202 million dollars in damage every day over the past 50 previous years, losses were primarily attributed to severe con-
years. According to the WMO’s report published in 2021, there vective storms in the United States.
were a total of 11,072 natural events between 1970 and 2019.
During this period, billion-dollar insured losses occurred in at
During this period, floods accounted for approximately 44% least 18 separate events. Out of these, 14 occurred in the Unit-
of all natural events, followed by storms at 35%, and droughts ed States, 2 in New Zealand, 1 in Turkey, and 1 in Western and
and landslides at 6% each. Extreme temperatures accounted Central Europe. Severe convective storm events in the United
for 5%, while the least common natural disaster was forest States dominated the list of the top 10 most costly events in
fires, at 4%. terms of insured losses. However, the most costly single event
in the first half of 2023 was the earthquakes in Turkey. Taking
The report from the United Nations International Strategy for into account both public and private insurance coverage, the
Disaster Reduction, comparing disaster statistics from 2000 total damage estimated to be caused by this event is believed
to 2019 with the previous 20-year period, also shows that the to exceed 100 billion Turkish Lira. This figure, considering the
number of most severe weather events has roughly doubled on average exchange rate in February and subsequent price infla-
average over the past 20 years. tion, is equivalent to 5.6 billion dollars.

Insurance is the most significant strength in this environ- The insurance industry, which plays a significant role in pre-
ment venting and mitigating risks in the fight against climate change,
Insurance is, of course, the primary mechanism designed to also holds great importance in raising awareness and fostering
cover losses resulting from large-scale natural disasters such as a sense of risk consciousness within society. Insurance serves
earthquakes, floods, hurricanes, and fires. With the increase in as a crucial safeguard against the losses that can occur as a
the frequency and intensity of natural events alongside global result of climate-related disasters, effectively acting as a shield
warming, the reality of earthquakes in our country also closely against the impacts of climate change.