Tuesday, July 5, 2011

"Swiss Re Warns Europe of Increasing ‘Soil Subsidence’ from Climate Change"

From Insurance Journal:

According to a new study from Swiss Re, “Europe is witnessing a dramatic increase in property damage as a result of soil subsidence.”  A new loss model developed by Swiss Re and the Swiss Federal Institute of Technology (ETH Zurich), also concludes that “climate change could magnify those risks.”

The publication suggests that “soil subsidence will worsen and spread in Europe, with some areas seeing a more than 50 percent rise in future losses. Prolonged dry spells, as recently seen in parts of Europe, can cause the ground to sink by so much that cracks appear in the earth, tearing apart the foundations of houses, bridges, factories and other structures. In the worst case, whole buildings can collapse.”...

...“Various risk transfer solutions are also available to protect against losses from such events. Besides traditional indemnity-based policies, parametric covers and index-based schemes could offer a viable solution. These innovative products, which pay out whenever their index crosses a predefined threshold, have the advantage of lower administrative costs and ensuring quicker disbursements.”...MORE
See also our post from a couple weeks after the monster 8.8 magnitude Chilean earthquake in February 2010:
"No Surprise: Chile Leads to Reinsurance Rate Increase Debate" BRK-A; BRK-B
No kidding.

A brisk breeze gets the boys in Omaha, Zurich, Munich and London (Lloyds) talking about premium increases.

Not to mention the herverzekering crowd in Amsterdam, they're tough bastards....