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Natural Disasters: Lessons from the Past ± Concerns forthe Future

by Wolfgang Kron�

Summary

The statistics of natural disasters with respect to number of deaths, economic losses andinsured losses are each dominated by different types of events: earthquakes and storm surgesrepresent the deadliest threat, ¯oods and earthquakes exert the most severe economic strainson societies, and storms are responsible for the highest insurance losses. Disasters inmountain areas are usually much smaller as their consequences are felt only locally. Thenumber of great natural disasters has increased by a factor of 3.2 from the 1960s to the 1990s.In the same period, the economic and insured losses they generated increased by factors of 8.6and 16.1 respectively. The main causes for this development are: the increasing concentrationof people and values in areas that are exposed to unfavourable natural conditions; theincreasing vulnerability of structures and goods; the ± often unjusti®ed ± trust in protectionsystems; and changes in environmental conditions including climate change. Despite all theefforts being made to prevent disasters by structural countermeasures, the risks in mountainareas are increasing due to the growing number of tourists and the unchanged practice of usinghazardous mountain sites for residential and recreational purposes.

1. Introduction

Nature has always produced extreme and excessive events that change the naturalenvironment and threaten people and their belongings. In former times man was almosthelplessly exposed to the forces of nature; he had to accept what happened and often the onlyway for him to reduce the consequences was to ¯ee the area and leave everything behind. Halfa century ago people started to believe that mankind was well on the way towards controllingnature. Understanding the genetics of natural processes combined with technical develop-ment seemed to be the basis for gradual but continuous improvement in dealing with naturalevents.

Anyone who follows the news can no longer be convinced of this. Accounts ofcatastrophic events caused by the untamed forces of nature ¯ood into our living rooms almostdaily. A natural disaster has hardly left the news when the next one hits the headlines. Thenumerous reports of bad news raise the question: is the number of natural disasters increasingor is it just the development of the worldwide communication technology that enables us to beinformed about events in remote areas immediately after their occurrence?

Before we can answer this question we must explain the difference between a natural

�Geoscience Research Group, Munich Re. Paper presented at `̀ Living with Natural Hazards'', CALARConference on Avalanches±Landslides±Rock Falls±Debris Flows, Vienna, 17±19 January 2000.

The Geneva Papers on Risk and Insurance Vol. 25 No. 4 (October 2000) 570±581

# 2000 The International Association for the Study of Insurance Economics.

Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF, UK.

event and a natural disaster (Kron et al., 1996). No extreme event ± however large it may be ±can become a disaster if it hits a region where there are no people and no man-made structures.On the other hand, a natural event that may not even be extreme may cause a catastrophe in adensely populated, little prepared region. A natural disaster can therefore occur only if twoconditions are given: a natural event, and people and belongings that can be affected.

2. Losses from natural disasters ± lessons from the past

Natural disasters with thousands of deaths almost always hit poor countries and aremostly caused by earthquakes (Table 1). The one aspect (poverty) is related to the highervulnerability in less developed countries (poorer quality of structures, more people), the other(earthquakes) to the sudden onset of such events, which strike without warning. Storm surges,too, can kill tens of thousands of people. However, with better forecasting, warning andprotection facilities, the consequences to be expected should be considerably less severenowadays.

Thegreatest economic losses (Table2)occur mostlyand thegreatest insured losses (Table3) exclusively, in rich countries. While two earthquakes still lead the table of record economiclosses, ¯oods, which usually affect much larger areas than earthquakes and occur much morefrequently, have at least the same importance. For the insurance industry, storms are clearly themost critical loss events, although earthquakes ± e.g. a big event in California, which may costthe insurance companies several billion dollars ± represent the greatest loss potentials.

Mountain disasters are usually much smaller as their consequences are felt only locally.Therefore they have ± so far ± not been among the important loss scenarios for economies andinsurance companies. The HuascaraÂn landslide (Peru, 1970, 70,000 deaths), the Nevado delRuiz lahar (Colombia, 1985, 25,000 deaths), the thousands of landslides after the 1920earthquake in Kansu, China (100,000 deaths) and the recent catastrophic debris ¯ows inVenezuela (December 1999, about 30,000 deaths) made it evident, though, that there is a largeloss potential in mountain hazards in terms of both values and human lives. Earlier in 1999 theavalanches in the Alps had already generated increased demand for better protection andinsurance cover. Nevertheless, mountain disasters will remain of relatively minor importance

Table 1:The ten deadliest natural disasters of the past 30 years�

Rank Year Event Country Fatalities

1 1970 Storm surge Bangladesh 300 0002 1976 Earthquake (Tangshan) China 290 0003 1991 Storm surge Bangladesh 140 0004 1970 Earthquake, landslide, tsunami Peru 67 0005 1990 Earthquake Iran 40 0006 1999 Floods, debris ¯ows Venezuela .30 0007 1988 Earthquake Armenia 25 0008 1985 Volcanic eruption, lahar Colombia 23 0009 1976 Earthquake Guatemala 22 000

10 1999 Earthquake (Izmit) Turkey .20 000

�Not including droughts.


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compared to those natural disasters that hit large regions, such as earthquakes, storms and¯oods. The tendency to become more serious, however, is as true for this kind of hazard as ofpractically any other because people tend not to avoid risky sites.

Although it can be ruled out that the number and intensity of geogenic events (e.g.earthquakes, volcanic eruptions) are increasing, their consequences have escalated drama-tically in recent decades, particularly in terms of the losses they generate. The ®gures for thetwo earthquakes of Northridge and Kobe (cf. Table 2) underline this statement. Although anincrease in both number and strength can be assumed for atmospheric events, this increase isalmost dwarfed by the rise in losses.

Table 2:The ten costliest natural disasters of the past 30 years�

Economiclosses

Rank Year Event Country/region US$ bn

1 1995 Earthquake (Kobe) Japan 1002 1994 Earthquake (Northridge) USA 443 1998 Floods China 304 1992 Hurricane Andrew USA 275 1996 Floods China 246 1993 Flood (Mississippi) USA 167 1990 Winter storms Europe 15

1991 Floods China 151995 Floods North Korea 151999 Floods, debris ¯ows Venezuela 151999 Winter storms Europe 15

�Original values, not adjusted for in¯ation.

Table 3:The ten costliest natural disasters of the past 30 years for the insurance industry�

Insured lossesRank Year Event Country/region US$ bn

1 1992 Hurricane Andrew USA 17.02 1994 Earthquake (Northridge) USA 15.33 1999 Winter storms Europe 10.24 1990 Winter storms Europe 9.85 1991 Typhoon Mireille Japan 5.26 1989 Hurricane Hugo Caribbean, USA 4.57 1998 Hurricane Georges Caribbean, USA 3.48 1987 Winter storm Western Europe 3.09 1995 Earthquake (Kobe) Japan 3.0

10 1995 Hurricane Opal USA 2.1

�Original values, not adjusted for in¯ation.


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Figure 1: Development of great natural disasters during the past half-century



An analysis of great natural disasters in the past half-century clearly shows that the lossesgenerated by natural disasters have been exploding since the 1960s (Figure 1). Great naturaldisasters are those in which the affected areas are clearly unable to help themselves andrequire interregional or international aid. This is normally the case when there are thousandsof fatalities, hundreds of thousands of people made homeless, or substantial economic losses(depending on the economic circumstances in the affected country). Only 27 suchcatastrophes were counted in the 1960s, but this number rose to 63 in the 1980s and 87 inthe 1990s. The increase took place more or less in two steps, which becomes quite clear if theaverages of 15-year periods are regarded. The period 1955±1969 produced 2.5 great naturaldisasters per year, 1970±1984 about 4.3, and the past 15 years 8.7 (Figure 1, upper section).The graphs for economic and insured losses (Figure 1, middle section) show a continuous andconstantly accelerating upward trend. The total losses from great natural disastersaccumulated to almost US$ 609 billion in the years from 1990 to 1999, which is ± takingin¯ation into account ± nearly nine times as much as in the 1960s (US$ 71 billion). Even moredramatic is the increase in the insured losses: US$ 109 billion (last ten years) versus aboutUS$ 7 billion (1960s) yields a factor of over 16. The causes for the disproportional increase ininsured losses can be found in the increasing insurance density; but what determines theincrease in total losses?

3. Causes for of increasing losses

The development of natural catastrophes over the past few decades cannot only beexplained by a rising severity of natural events. It must be attributed primarily to theincreasing concentration of people in areas that are exposed to unfavourable naturalconditions and to the increase in loss potential through highly valuable and highly sensitivestructures, installations and building contents (Munich Re, 1999).

3.1 Use of hazard-prone areas

The dramatic increase in population throughout the world, and particularly in regionsthat are at risk to begin with, forces people to settle in areas that are extremely exposed tonatural hazards. Bangladesh, for instance, is too small in area for a population of more than130 million people. There are about 1,000 people per square kilometre, giving it a populationdensity four times as high as in Germany, which in itself is a densely populated country. Nopiece of land remains unused.

In Latin America, many of the favelas and ranchos, the settlements on the edges of thesubcontinent's metropolises, are built on completely inadequate soil and are often virtuallyclinging to steep slopes. There are many places where settlements built on loose waste dumpsand hazardous slopes provide the only chance of people ®nding somewhere to live. Bansissued by the authorities do not usually help very much because there is no way of enforcingthem in practical terms. As a result of heavy rainfall or sometimes even a slight ground motioncaused by a passing lorry, for instance, or an earthquake, entire settlements begin to slitherdownhill. Mountain hazards in general are characterized by small triggering factors, theyhave usually a very sudden onset and occur in a surprising way, but they may haveconsiderable ± though mostly local ± consequences. Protection and mitigation are verycostly, prevention often impossible.

In other places it is the favourable economic conditions, climatic advantages or simplythe natural beauty that attracts humans, who do not care about the prevailing risk (e.g.


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California, Florida). More than 40 per cent of the world's population of more than six billionpeople lives in conglomerations, that is twice the percentage of 40 years ago; within the next40 years this proportion is expected to reach 60 per cent. The concentration of settlements indisorderly and wildly growing conglomerations creates megacities, in which chaoticconditions are foreseeable during a disaster and which are therefore extremely vulnerable.The worldwide number of cities with a population of more than one million has increasedworldwide from 78 in 1950 to 361 in 2000. As a consequence the probability that a severenatural event will hit such a city has increased as well. The streams of refugees caused bypolitical or economic circumstances worsen this problem. After their displacement peoplelive in an environment with which they are not familiar and whose dangers they cannot assess.They also do not know how to behave, act or react, in the event of an emergency. The same istrue for the legions of tourists and people with second homes in a foreign country. They are notfamiliar with the threats from avalanches in ski resorts, hurricanes on Caribbean islands orstorm surges in holiday homes on the beaches, and consequently underestimate them.

3.2 Mountain areas

Mountain areas are not the most typical examples of sites with a spectacular growth inthe residential population, but the proportion of visitors has increased as in no other type oflandscape with the possible exception of the areas close to sandy beaches along warm oceanshores. Masses of hiking, skiing, mountaineering, mountain-biking and sightseeing visitorsinvade the European Alps, the American Sierra Nevada and Rocky Mountains and even the ±until very recently almost `̀ virgin'' ± regions of the Andes and the Himalayas. The ®rst waveof adventurers is usually not critical; these pioneers are aware ± and often even in search of ±the risk. The second wave, the followers, causes a boost in the area's development atsometimes incredible speed, setting the stage for mass tourism, the third wave. This lattergroup of visitors is mostly completely unaware of the fact that the area in which they arespending their vacation is by nature inhospitable, which is the very reason why few peoplelived there in the past and why certain areas were avoided.

The expansion of mountain resorts is accompanied, of course, by technical protection inthe form of avalanche and sediment control structures and hydraulic engineering measures inmountain torrents. These measures reduce the number of damaging events, but only the oneswith a high frequency and a low impact. Extreme events can hardly be prevented. At the sametime the development of the landscape outside the settlements proceeds. Mountain forests arecut in exchange for ski slopes, ski lifts and cableways, and even grass has a hard time growingon slopes that have been compacted in the winter by heavy snowcats and scarred in the springby skiers who try to exercise their sport until the very last traces of snow have melted.Hence erosion, a condition for debris ¯ows, is much less prevented and avalanche paths areopened.

3.3 Human nature and disaster preparedness

Protection measures, while reducing the frequency of dangerous events, have oneunfavourable effect: they also reduce the awareness that disaster may strike. People trust inprotection, forget, neglect or even deny the threat ± and are completely surprised when`̀ nature strikes back''. When an extreme event happens or if protection fails, theconsequences tend to be more serious. In fact, though, few events can be attributed to naturestriking back. In most cases, disaster is the result of a perfectly normal ± but rare ± natural



event. The event only becomes a disaster because people are now living in a place where thesame kind of event happened more or less regularly in the course of time. Many alluvial fanscreated by numerous debris ¯ows in the past are today covered with settlements and it is only amatter of time before the next debris ¯ow will destroy these buildings. This way risk is created.

Risks can be increased willingly or unwillingly by providing wrong information and byplaying downthe existing risk. In this context local interests such as the desired development ofa town or the attempt of the local tourist industry to attract guests by all possible means withoutinforming them of the local hazards are often important factors. On the other hand, methods offorecast,prediction,earlywarningandalerthavebecomemoresophisticated,moreserviceableand more reliableat least as far as somenatural hazards are concerned (Kron et al., 2000). In thelong term, the accurate assessment of a natural threat can be incorporated into building codes(earthquake-resistant structures, storm-proof roofs, etc.) and transformed into land-userestrictions (¯oodplain construction ban, volcanic security areas, etc.). For short-term needs,modern detection, observation, evaluation and communication methods, e.g. by satellites, areavailable to help prepare a threatened region for an imminent extreme event.

3.4 Values and vulnerability

Almost anywhere ± not only in rich countries ± the values that each and everyone ownshave become greater and more susceptible to water, shaking, vibration, power failure, frost,lightning, smoke, etc. In former times burning materials were stored in basements that couldbe dried after inundation and still used afterwards, whereas today the electronically controlledoil burner has to go to the junkyard if it has been ¯ooded. The industrial sector abounds withhighly sensitive elements, among them the clean rooms for producing computer chips. Inthese rooms enormous losses are caused even by the slightest trace of air pollution (smoke,dust, water vapour).

The accumulation of values and, therefore, the loss potential is also closely related to thefeeling of security that is conveyed to the people by existing protection measures. Responsibleland-use policy, the most ef®cient way of disaster control with respect to risk mitigation andloss reduction, is non-existent or at least inadequate in most parts of the world. This is true indeveloping countries as well as in highly industrialized countries. Inappropriate buildingcodes may be another reason for high vulnerability. Mostly it is not the de®ciencies in suchlaws and regulations though, but rather the lack or slack control and enforcement both of land-use regulations and building codes. Without stricter control worldwide losses (economic andinsured) are bound to rise further.

Another problem is the worldwide networking of production processes and the `̀ just-in-time'' philosophy. After the Taiwan earthquake in September 1999, which paralysed two ofthe world's largest semi-conductor plants through power failure and caused several days ofbusiness interruption, the price of computer chips immediately went up. The Great HanshinEarthquake (Kobe, 1995) revealed strikingly how much industrial production processesdepend on a reliable and timely supply of parts. The failure of a single little wheel in thismachinery can bring the whole production process to a halt.

4. The risk partnership against natural disasters

Preparedness for natural disasters is a task that concerns everyone. The system of riskpartnership is essentially made up of three components: public authorities and institutions ±


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individuals and companies ± insurance and reinsurance industry. Insurance cover is animportant cornerstone of the protection system against natural hazards (Kron, 1999);

Public authorities are responsible for the basic protection against and preparedness fornatural events. This responsibility includes structural and non-structural measures such as theestablishment of an infrastructure for disaster reduction, the construction of dikes,observation and warning systems, building codes, land-use restrictions, etc. All these areaimed at protecting the community as a whole and not individuals. Structural measures aremainly designed to reduce the loss frequency by averting damaging events of smaller sizes,whereas non-structural measures reduce losses during extreme events. Disaster reliefmeasures all the way from emergency assistance to reconstruction complete the catalogueof public responsibilities.

Disaster preparedness on the part of those threatened by natural events is of crucialimportance. Hardly any other measure adopted for the purposes of loss reduction is asef®cient as the contribution made by people themselves. They are the ones who transform thegeneral guidelines of building codes to ®t their own individual situation; they are the ones whotry to minimize the damage by supporting civil defence and disaster assistance measures andby moving their belongings to a safe place in good time. In this context, an important role isplayed by the third component, insurance. An insurance contract of professional design(which basically entails the incorporation of a substantial deductible) motivates policyholdersto take measures aimed at reducing their own loss and at the same time the overall loss. Thegoal of insurance is not to cover any loss ± even the smallest one ± but rather to secure theclient's basis for living.

Small, medium, and even most large loss events are `̀ business as usual'' for the insuranceindustry. For these events, insurers and reinsurers merely serve as a tool to redistribute fundscollected from a large quantity of potentially loss-threatened individuals to an actuallydisaster-struck group. All losses are ± in the long run ± paid by the insureds. They can ±through adequate measures ± reduce their ®nancial burden by adjusting their homes andbusinesses as well as their behaviour to the loads exerted by rare (and not so rare) naturalevents. This requires knowledge of the threat, in particular of an imminent threat. Suchknowledge can be supplied by well-functioning early-warning systems.

Natural disasters are capable not only of ruining individuals and enterprises, but also,due to their tremendous loss potential, of wiping out entire insurance companies. The GreatHanshin Earthquake of Kobe (1995) caused economic losses of about US$ 100 billion. Hadthe insurance density been higher than just around 3 per cent, the event could easily havetopped the costliest natural catastrophe for the insurance industry to date, Hurricane Andrewin 1992, when it had to cover losses of US$ 17 billion. On the other hand, Andrew missed themetropolitan areas of Miami and New Orleans by a mere 20 to 30 km. A slightly shifted path



could have tripled the losses. Nevertheless, the hurricane swept 13 primary insurancecompanies from the market in the American Southeast. This shows the key role reinsurersplay within the insurance industry in the context of natural hazards. Only the worldwidespread of insured losses can prevent the destruction of a local or regional insurance market bya major natural catastrophe.

As a rule, insurance companies react very quickly to losses from natural events andreimburse their clients immediately. Apart from the bene®ts of the very helpful ®nancialsupport they provide, the psychological effects of prompt assistance are very important for thepeople concerned. They do not feel left alone in an extremely dif®cult personal situation. Thisproblem occurs if governmental ®nancial aid is promised but the payments are delayed for along time because of administrative reasons. Also the actual payments seldom match theamounts promised by politicians right after a catastrophe. For insurance companies that do notneed to go through long political decision-making processes and can react immediately, quickhelp too has advantages. Their mottoes are: `̀ The faster the cheaper'' and `̀ Good lossadjustment is the best promotion''.

Even if some people believe that `̀ insurance companies need natural disasters, becausethey keep the desire for ®nancial security awake'', the insurance industry still has a greatinterest in combating the consequences from them, of course also with the goal to keepingtheir own losses low. A ruined client, however, cannot be an insurance client at all. Besidesensuring that their insurance conditions are of ef®cient design, therefore, they put a great dealof emphasis on information that can have far reaching positive effects. By de®ning hazardzones, some pressure can be exerted even on political decision makers on all levels. Only theintegrated co-operation of the three described components in the sense of a risk partnershipallows ef®cient risk and loss reduction.

5. The current position ± concerns for the future

In theory, there are many ways and means of reducing the impacts of natural extremeevents that are known and could be implemented. In practice, however, there are restrictions.One is simply money, the second is people's habits and their ways of thinking and acting. In thefollowing some of the main factors for the future development of natural disasters will beaddressed.

5.1 Global change and communications

People all over the world will become ± either voluntarily or involuntarily ± even moremobile than they already are today. The strategies developed in the course of time by locals toadapt to the surrounding environment will be unknown or disregarded by the newcomers. It isalso fashionable to even seek risk, or at least to neglect it when leisure activities or holidays areconcerned. The rapidly changing world with its everyday cross®re of news, impressions andquick changes additionally supports people's tendency to forget.

5.2 Population growth

The increase in the world's population will persist. Global population will reach 7.3billion by 2015, having then created some 450 cities with a population of more than onemillion. At the same time the biggest conglomerations will become even bigger, especially indeveloping countries, where infrastructural development is lagging way behind population


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development. These highly vulnerable megacities carry tremendous loss potentials. Theirmere presence raises the probability that one of them will be hit by a disastrous event.

5.3 Politics

Political events in many parts of the world and in particular ethnic problems and thestriving for independence will continue to generate streams of refugees who are particularlyvulnerable due to the lack of proper dwellings and knowledge of the environment into whichthey ¯ee. One serious problem that mankind will face sooner or later is the lack of waterresources and ± as a consequence ± there will be ®ghts over the supplies of water that areavailable.

5.4 Economy

Economic systems do not react very differently from humans. After events like the Kobeearthquake the problems of extensive networking and interdependencies may be underdiscussion ± and even be changed to some extent ± but after a while these changes are oftensacri®ced again to the optimization of production and net yield. Just-in-time productioncombined with globalization may affect the whole world even after a local event. Movingproduction sites from developed to developing countries with the primary aim of loweringproduction costs often also takes advantage of less strict safety and construction standards atthe new location, whereas the hazard situation there may be less favourable.

5.5 Land use

Almost everyone is aware of the problem of improper land use. However, many of thepeople that settle in high-risk areas simply have no choice. The increasing population will notallow any change in this sector but rather worsen the problem. People not only move tohazardous zones but they also increase the hazards by extensively using the land there, whichresults in the impairment of the environment (including pollution) and the promotion of soilerosion (e.g. by over-grazing, cutting forests, establishing infrastructure, etc.).

5.6 Trust in technology

Despite the obvious impossibility of preventing natural disasters and of reducing risks tozero, people's belief in their ability to control nature is widely unshaken. This attitude ofignoring and belittling risks leads to their further increase. Great disasters come as a shock butthey are supplanted by other events and other news, and often other disasters.

5.7 Climate

The threat from natural hazards may increase further as a result of the continuing rise inthe world's average temperature due to climatic changes. Global warming will increase thefrequency and intensity of extreme events, shift the spatial and temporal occurrence of severeweather conditions, lead to rising sea levels and cause other environmental changes (Berz,1998). Unfortunately all these aspects tend to increase the risk in most parts of the world, evenwhere there is a shift in the climate to milder conditions.

Central Europe, for instance, is thought to be getting warmer and drier overall, but



warmer winters will bring more ¯oods, and the indirect consequence of a reduced snow coverwill be that strong high-pressure systems cannot develop over Eastern Europe and storms cantherefore penetrate deeper into the continent. Apart from a shift in the rainy season, moreintense wet or dry periods are to be expected. The higher energy content in the atmosphere willalso lead to a greater variability of weather-related features. Warmer oceans, directly leadingto the inundation of coastal lowlands such as deltas and small islands as a result of the thermalexpansion of the water will be accompanied by a greater number of tropical storms, which candevelop only in ocean regions where the surface temperature exceeds 258C. Ocean regionsthat meet this condition will become larger with a higher global temperature. Very seriouseffects arise from changes in ocean circulations. One well-known phenomenon is the El NinÄo/La NinÄa pattern which has a considerable impact on global weather conditions. Anotherconsequence ± with possibly even more dramatic effects ± may be the breakdown (orsouthward shift) of the North Atlantic circulation. Without the Gulf Stream the regionalclimate of Great Britain, Norway and even Central Europe would be considerably colder.

In cold climates such as in high mountain regions, glaciers will retreat and permafrostregions thaw. As a consequence newly exposed, unstable slopes will become prone tolandslides and debris ¯ows, and higher and more frequent ¯oods will occur as the storagecapacity of glaciers during intense rainfall is reduced. This will also happen if precipitation inwinter falls as rain instead of snow. Higher snow packs can be expected, increasing theavalanche hazard. A large majority of scientists now accept that the ongoing climate change isin¯uenced by anthropogenic activities.

5.8 Insurance

Today, insurance is widespread in only a few countries. The current slow increase in theinsurance density is unlikely to change dramatically in the near future, because both sides,customers and insurers, are not really promoting such a development. On the one hand,customers' demands are impaired by a growing number of people with a lack of ®nancialresources and, on the other, the willingness of insurance companies to cover certain risks isvery limited because of their magnitude, the great amount of uncertainty involved or becauseof accumulation control considerations (e.g. insurance for storm surges). Wherever naturaldisaster insurance is possible, available and in operation, however, it will help ± by spreadingthe risk throughout the world via the reinsurance sector ± to reduce the vulnerability of a thesociety in terms of its exposure to natural hazards.

6. Conclusions

Losses from extreme natural events have increased substantially in recent decades andwill continue to increase in frequency and severity in the 21st century. At the moment there isno indication that the rising trend is going to stop in the near future. Global changes (climatic,political, economic) and the increases in population and values are the main factors in thisprocess. Climatic changes especially are expected to make the situation even more severe asthey have just begun to produce noticeable effects, as demonstrated by recent weatherpatterns.

On the other hand, technical and organizational measures of protection and preparednessincluding early-warning systems are available and have evidenced a good level of ef®ciency.Natural disaster reduction, however, is a very complex ®eld which can not be addressed bystructural and organizational measures alone nor just by early warning. After all, it is man who


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exposes himself to the forces of nature through his behaviour and chooses ± or accepts ± acertain risk. To some extent, though, he can, by taking appropriate measures, control or at leastmitigate the risk from an existing hazard. A well developed risk awareness among thepopulation and disaster managers is of crucial importance. This is ± among other things ± aprecondition for the effectiveness of early-warning systems. Early warning can only betransformed into proper and immediately effective protection measures if everybodyunderstands their meaning well.

To sum up, one can say that the dramatic trend of disaster losses can only be lessened by apackage of integrated countermeasures including strict land use regulations, warningsystems, education, and (®nancial) motivation. These measures have to be supported by allthe people and institutions involved: public authorities, scientists and relief organizations,individuals and enterprises, insurance and reinsurance companies. The insurance industryand the world of science and technology must join together in formulating their requirementsand prepare them in such a way that the political powers can derive clearly recognizable policyoptions from them.

REFERENCES

BERZ, G., 1998, `̀ Catastrophes and climate change: concerns and possible countermeasures of the insuranceindustry'', Proceedings IPCC Adaptation Workshop, Costa Rica, April 1998, pp. 69±77.

KRON, W., 1999, `̀ Insurance aspects of river ¯oods'', in Bronstert, A. et al. (eds.), Proceedings of the EuropeanExpert Meetingon the Oder-Flood 1997 ± RIBAMOD concerted action. European Communities, pp. 135±150.

KRON, W., PLATE, E. and VOLLMER, S., 1996, Natural Disasters and Disaster Reduction. Vol. 1, German IDNDRseries, 75 pp.

KRON, W., BERZ, G. and SMOLKA, A., 2000, `̀ Bene®ts of early warning from the viewpoint of the insuranceindustry'', Proceedings of the World Conference on Early Warning, Potsdam, 7±11 September 1997.

MUNICH RE, 1999, Topics 2000: Natural catastrophes ± the current position. Munich Reinsurance Company,126 pp.



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