Although the vast majority of weather-related insurance losses occur in wealthy countries, most of the human suffering occurs in poor countries (Figure 8-6). Whereas 45% of the natural disaster losses between 1985 and 1999 took place in wealthy countries (those with per capita income of more than US$9,360), these countries represent 57% of the US$984 billion in total economic losses and 92% of the US$178 billion in insured losses (Munich Re, 1999b). In contrast, 25% of the economic losses and 65% of the 587,000 deaths took place in the poorest countries (those with per capita income below US$760).

Other literature sources, using slightly different definitions and different time periods, conclude that about 90% of deaths from natural disasters from 1973 to 1997 occurred in Africa and Asia (IFRC-RCS, 1999a). Figures from the World Disasters Report 1999 (IFRC-RCS, 1999a) indicate that, in the period from 1973 to 1997, on average nearly 85,000 persons were killed each year by natural disasters; the number of otherwise affected (impoverished, homeless, injured) was more than 140 million annually. The record of disasters (see Figure 8-6) is a further illustration of the geographic distribution of weather-related disasters.

As indicated in Chapter 3, climate change comes with changing frequencies and intensities of extreme weather events. The most vulnerable regions and communities are those that are both highly exposed to hazardous climate change effects and have limited adaptive capacity. Countries with limited economic resources, low levels of technology, poor information and skills, poor infrastructure, unstable or weak institutions, and inequitable empowerment and access to resources have little capacity to adapt and are highly vulnerable (see Chapter 18). The regional chapters in this volume (Chapters 10-17) indicate that developing countries, because of their limited or nonexistent financial buffers, are particularly vulnerable to the effects of climate change. Human-induced climate change is expected to result in a further upward trend of disaster losses.

Developing countries—especially those that are reliant on primary production as a major source of income—are particularly vulnerable because these countries and their communities hardly have any financial buffer and there is very little penetration of insurance (see also Figure 8-6). The conditions facing private insurance markets and government disaster relief differ considerably in developing countries. The penetration of private insurance is extremely low in most cases, although it is growing quickly. The degree of preparedness also is low. The government sector is far less able to operate as a surrogate insurer, even in areas such as crop and flood insurance where governments traditionally are essential in the developed world. In developing countries, the economic and social impacts of catastrophic weather events can pose a material impediment to development. Increased frequency or intensity of such events as a result of climate change could render these markets less attractive than they are at present for private insurers, in turn compounding the adverse impact on development. Thus, developing countries tend to have greater vulnerability and less adaptive capacity than developed countries.

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