Prosperous New Fear

by | Jan 6, 2009

Before we get stuck into 2009, we missed a spillage from the festive period that needs mopping up…

In a remarkably gullible news item, the BBC covered a new report revealing that 2008 was a ‘Huge year for natural disasters’:

The past year has been one of the most devastating ever in terms of natural disasters … climate change [is] boosting the destructive power of disasters like hurricanes and flooding

The report finds that:

Although there were fewer “loss-producing events” in 2008 than in the previous year, the impact of natural disasters was higher […]

More than 220,000 people died in events like cyclones, earthquakes and flooding, the most since 2004, the year of the Asian tsunami.

Meanwhile, overall global losses totalled about $200bn (£137bn), with uninsured losses totalling $45bn, about 50% more than in 2007.

This makes 2008 the third most expensive year on record, after 1995, when the Kobe earthquake struck Japan, and 2005, the year of Hurricane Katrina in the US.

The BBC article quotes expert Torsten Jeworrek:

“Climate change has already started and is very probably contributing to increasingly frequent weather extremes and ensuing natural catastrophes,”

Thing is, Torsten Jeworrek is an expert in insurance, not climate. He is on the board of insurance giants Munich Re. And Munich Re are the authors of the new report. It goes without saying that insurance companies need to keep abreast of developments in risk if they are to provide a service for their clients. But it also goes without saying that generating alarm about those same risks is also to their advantage. To paraphrase what we have said before, fear of risk is to Munich Re what oil is to Exxon. Indeed, Munich Re says as much on its website:

Risk is our business: Among other things, we reinsure the risks connected with oil rigs, satellites and natural catastrophes, and those arising from the use of genetic engineering and information technology or from the management of companies.

Climate change is not the only issue Munich Re is whipping up alarm about. It also desires that we flap over other scares du jour, such as piracy…

Piracy reaches new dimensions: The frequency and severity of piracy attacks have reached alarming levels


Megacities extremely vulnerable to natural perils, technological risks, terrorism and environmental hazards / More risk awareness and greater transparency urgently needed with regard to hazard exposure / Munich Re presents its views at the UN’s World Conference on Disaster Reduction

and obesity…

Obesity and type 2 diabetes are spreading at an alarming rate around the world

But, mostly, it’s climate change…

10 April 2008
India: Increase in losses due to climate change / Board member Torsten Jeworrek: “In coming decades, the effects of climate change will make themselves felt particularly in emerging countries like India.”

climate change…

29 September 2008
Munich Re exhibition in Tokyo highlights risks and opportunities of global warming

climate change..

27 December 2007
Natural catastrophe figures for 2007: Higher losses despite absence of megacatastrophes, very many loss events / Overall economic losses of US$ 75bn / Board member Dr. Torsten Jeworrek: Loss figures in line with the rising trend in natural catastrophes, Munich Re is prepared

climate change…

July 2008
High death toll marks the 2008 half-year natural catastrophes figures

and climate change…

5 June 2007
Munich Re signs the “Declaration on Climate Change” of the United Nations Environment Programme Finance Initiative. / Munich Re Board member Torsten Jeworrek: “Climate change is one of the greatest challenges of our time. What we do today is crucial for future generations. Therefore, swift international action is urgently needed.” / Munich Re forecasts long-term increase in demand for risk protection as a result of climate change and growing concentrations of values.

And there’s plenty more climate change where those came from.

Munich Re is certainly not the first insurance company to try to cash in on climate alarm by generating more of it. Back in April 2007 we reported on the efforts of risk assessment giants Risk Management Solutions (RMS) to do the same. Bob Ward, RMS’s Director of Global Science Networks, was continuing a crusade against the dirty denialist industry – namely, Exxon and Martin Durkin – that he started while in his previous employment as Senior Manager for Policy Communication for Exxon-slayers the Royal Society.

What is surprising is that the BBC have deemed the witterings of an insurance company worthy of a news story, and moreover, that they have chosen to take those witterings entirely at face value. At the very least they could have wondered why earthquakes were lumped into the analysis or how much the figures were skewed by one devastating cyclone in Myanmar.

Torsten Jeworrek’s quotes – like the whole BBC story, in fact – are lifted directly from Munich Re’s press release. But then, perhaps the BBC didn’t have much choice (other than to ignore the story completely) because Munich Re haven’t actually made their report available. When we emailed them for a copy, media relations officer Alexander Mohanty replied that:

there is no additional report or publication.
Munich re’s annual report on natural catastrophes is a press relase only traditionally.
But we will publish a more in-depth report in march called ‘topics’.

The BBC has been known to argue that the existence of ‘the consensus’ on climate change means that they are not obliged to seek balancing viewpoints from anyone who doesn’t entirely sign up to it. With this story however, they seem to be going rather further than is necessary to live up to their own journalistic ideals. They back up Jeworrek’s comments with quotes from Peter Hoppe, head of Munich Re’s Geo Risks Research, which are also lifted verbatim from the presser:

“It is now very probable that the progressive warming of the atmosphere is due to the greenhouse gases emitted by human activity,” said Prof Peter Hoppe, head of Munich Re’s Geo Risks Research.

“The logic is clear: when temperatures increase there is more evaporation and the atmosphere has a greater capacity to absorb water vapour, with the result that its energy content is higher.

“The weather machine runs into top gear, bringing more intense severe weather events with corresponding effects in terms of losses.”

The company said world leaders must put in place “effective and binding rules on CO2 emissions” to curb climate change and ensure that “future generations do not have to live with weather scenarios that are difficult to control”.

Yes, ‘the logic is clear’…

– the world has been warming up a bit
– human activity probably has something to do with that
– some models say this might influence the frequency of severe weather events
– therefore, an expensive year for civilisation (and insurance companies) means that climate change is already happening
– therefore, we need a global agreement to reduce carbon emissions

Other than pointing out that Hoppe’s clear logic is clearly not, it’s hard to comment on the accuracy and rigour of Munich Re’s analysis, because, as we said, the analysis is not available for scrutiny. But it’s hard to see how an insurance company can have had more success than ‘the world’s 2500 top climate scientists’ at isolating the effect of climate change on the occurrence of severe weather events. But then again, perhaps we can look forward to the IPCC citing Munich Re on matters of climate-change induced weather patterns in its own reports in the future. And in a world where top scientists are wont to defer to economists on scientific matters of climate change, that is not such an unlikely possibility.

It is perhaps interesting that the economist in question, Professor Lord Sir Nicholas Stern, has rather a close working relationship with Munich Re. Understandably, Munich Re is rather proud of the fact that its dirty insurance money funds such a high profile environmentalist:

In 2008, Munich Re launched a cooperation with Professor Lord Nicholas Stern and the London School of Economics (LSE), the aim being to advance research into the economic impact of climate change.

And Prof Lord Sir Nicholas has nothing to be embarrassed about. Because nobody – least of all the BBC – seems at all bothered by any such conflict of interests. They are all too busy worrying about who Exxon is funding. Those who shriek the loudest about climate change – whether it’s insurance companies, Stern, the Royal Society, Lord Adair Turner or the Tickell dynasty – often have the most to gain from alarmism. It seems that the greens have been right all along: an economic tail really does wag the scientific dog.


  1. Rich

    If the probability of an insurance event increases or its probable impact increases then it is necessary to increase the premiums of insurance to cover them.

    If, in fact, the frequency or impact of said insurance events does not increase then the insurance company makes a bigger profit.

    I don’t think either of these statements is controversial.

  2. geoff chambers

    Species in danger, natural disasters increasing.. Your two most recent posts provide devastating examples of three venerable British institutions – the Guardian, Observer, and BBC – (average age, 150 years (old enough to know better) – printing absurd stories from incompetent sources on the flimsiest evidence, all to make us feel bad about travelling or switching on the electric fire.

    Congratulations on the detailed analysis. A simple question: why do you say (in the previous post “A Notional Trust”) “This isn’t really a story about ‘bad science’, or bad journalism..” when it seems to be exactly that? Bad science in the sense that Ben Goldacre uses it constantly in the Guardian, i.e. non-science (wittering in the case of the National Trust, touting for business in the case of Munich Re) masquerading as science. Bad journalism for the reasons you make abundantly plain yourselves. You call it Chinese whispers, I’d say urban myths, (though that tends to suggest something downmarket and Daily Mailish – shall we say Hampstead Myths?) Anyway, you’re right to expose it.

  3. Editors


    “Bad science” is a fairly specific thing. It implies (we think) that all we need to know to understand what is going on is the science. We still need a panel of scientists if we want to understand the special politics that has been demanded by exaggerated environmental concern.

    We choose ‘Chinese whispers’ over ‘urban myths’, because, the latter implies that the ‘urban myth’ drives the phenomenon of environmentalism. What we’re trying to explain is that the dynamic is not the myths as such, but the hunger for them.

    Maybe you’re right that it is ‘bad science’ and definitely it’s bad journalism, but we don’t think this is the whole picture. It’s also bad politics, and bad philosophy comprising bad metaphysics, bad ethics, and bad logic. And probably a few other bads in there too.

  4. geoff chambers

    wow! a reply an hour later! Big Brother or what?
    I think I understand, and agree with, your reply, except for:

    (1) “We still need a panel of scientists if we want to understand the special politics that has been demanded by exaggerated environmental concern.”
    You are political scientists (I think), and I’m not. Please explain what a panel of scientists can provide for an understanding of politics which a panel of simple electors can’t.

    (2) “It’s also bad politics, and bad philosophy comprising bad metaphysics, bad ethics, and bad logic. And probably a few other bads in there too.”
    Would you accept bad psychology? I’ve just been reading Mr & Mrs Hansen’s plea to Mr & Mrs Obama to save the world. It’s eco-political-correctness squared. Anti-science preached by a high-priest of scientism. This is the philosophy which will guide the world for the next few months or years. God(lessness) help us all.

  5. Editors


    (1) Nothing. That’s the point. We were pointing out a limitation of the ‘bad science’ approach. We’ve argued here that even if the scientific claims of the environmental movement were true, it wouldn’t legitimise their politics. But to criticise the movement for its bad science although useful in many respects, misses the point that people (the general public) are capable of making decisions. In other words, it fails to look at environmental movement as a political phenomenon that can be criticised by anyone. It hides behind science – it’s not constructed from it.

    (2) Of course. We’ve pointed out many examples of bad psychology (and psychiatry) in the past.

  6. Alex Cull

    I think we can probably add “bad sociology” to the mix as well. Going on from Stefan’s comment on the previous post, I found references to the 11th Annual UN Climate Change Conference (Montreal, 2005) and a speech by Ulrike Rohr from a German group called genanet:

    “[We demand] climate gender justice! … Women and men are differently affected by climate change and they contribute differently to climate change. To give you an example from Germany, it is mostly men who are going by car. Women are going by public transport mostly.

    At least in the developing countries, it is women who are more affected because they are more vulnerable, so they don’t have access to money to go outside the country or go somewhere else to earn money and they have to care for their families.

    What we are calling for is to take into account more of the social aspects of climate change.”

    Here’s the genanet homepage:

    And here’s the homepage for gendercc (Women for Climate Justice):

    Aims: “ is our response to the growing public attention to climate change, and the increasing need for information about women’s perspectives and gender aspects in climate change policies and measures.”

    Climate gender justice… Does this mean all the school-run mums driving gigantic people-carriers in my part of London are willing accomplices of the climate patriarchy? Or are they merely gender slaves to the (male) carbon elite? :o)

  7. Spanner

    Good article )and my admiration for the research) simply because it exposes the gravy train of self serving commercial interests that’s grown up to fuel the climate con artists of this world.

    Quite simply the hurricane and cyclone records demonstrate a decline in the numbers and force. The primary reason insurance losses have increased is migration of people (and therefore increase in property value) to more attractive coastal areas such as Florida in the natural hurricane path.

    As your article states what volcanos is doing being included in this junk science report is a matter for investigation as is the fact the research is being shrouded.

    The BBC’s journalistic principles (balance, fairness, checking research integrity etc) have fallen throught the floor since they ‘removed’ key personal over the Iraq/WMD issue and the David Kelly affair. On climate science they are tragically biased and entirely one-sided. This is a ‘public service’ broadcaster that pays lip service to integrity and has become frankly corrupt (you should have seen their bias for Obama versus McCain).

    Keep up the great work :)


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