Last week, global reinsurance services provider Swiss Re Group shared some rather interesting statistics regarding natural disaster costs in the first-half of 2013.

A preliminary analysis of natural disasters in the first-half of this year indicates $56 billion in economic losses from disasters. That compares with $67 billion reported in the first-half of 2012. Global insurance covered upwards of 35 percent of these losses, amounting to $20 billion. These disasters claimed 7000 lives.

According to the Swiss Re analysis, flooding was a main-driver of natural catastrophe related losses accountingfor nearly $8 billion in global insurance claims. The reinsurer states that this figure indicates that 2013 is already the second most expensive calendar year in terms of insured flood loses.  To no surprise of our supply chain management reading audience, 2011 was the single most expensive year. 

The most significant flooding event this year concerned the heavy rains that impacted Central and Eastern Europe in June which Supply Chain Matters alerted our readers to. Economic losses due to flooding in Europe were reported to be $18 billion. The flooding in northern Germany was described as the worst flooding to hit parts of that region in more than 50 years. Significant flooding also impacted Alberta, Canada as well as western and middle portions of the United States.

As was the case in 2012, severe tornado occurrences also impacted the U.S. Midwest region. One of the largest recorded tornadoes, rated 5 on the Enhanced Fujita scale, impacted the areas around Moore Oklahoma in May.

While the global trend for disaster losses in only slightly better thus far in 2013, who knows what is in store for the second-half of this year.  Already, parts of Asia have entered the typhoon and monsoon rains season.

This data is yet another timely reminder for supply chain and product management teams to insure that robust supply chain risk identification, mitigation and business continuity plans are vibrant.  Reviewing some recent research surveys, Supply Chain Matters was somewhat taken back by indications that risk management has taken a lower priority in supply chain circles.  Focus on the above data highlights, especially the losses that are uninsured or self-insured, not to mention the disruption to supply chains.

While teams have little ability to change the forces of climate change, they can be prepared as much as possible for certain effects of  major supply chain disruption.  For our part in education and knowledge, Supply Chain Matters will continue to alert our readers to events and consequences.

Feel free to share in the Comments section below, the challenges that your organization faced from occurrences of natural disaster and catastrophe.


Bob Ferrari