December 13, 2010

A Trend Analysis of Normalized Insured Damage from Natural Disasters

by Fabian Barthel and Eric Neumayer

- As the world becomes wealthier over time, inflation-adjusted insured damages from natural disasters go up as well. This article analyzes whether there is still a significant upward trend once insured natural disaster loss has been normalized. By scaling up loss from past disasters, normalization adjusts for the fact that a disaster of equal strength will typically cause more damage nowadays than in past years because of wealth accumulation over time. We analyze trends at the global level over the period 1990 to 2008, over the period 1980 to 2008 for Germany and 1973 to 2008 for the United States.

Barthel, F. and E. Neumayer (2010). "A Trend Analysis of Normalized Insured Damage from Natural Disasters." Grantham Research Institute on Climate Change and the Environment Working Paper No. 30, Nov 2010.