Wednesday, May 18, 2011

Lloyd's of London warns insurers to raise premiums or risk collapse - Insurers that fail to put up premiums will be the first to collapse if another big natural disaster strikes, the head of the Lloyd's of London insurance market warns. The London market's lucky streak of relatively benign Atlantic hurricane seasons may be coming to an end, and the next big natural catastrophe will hit the industry's capital, not just earnings, unless rates rise. Firms insuring property against catastrophe risk, as well as marine insurers that insure oil rigs, would be among the worst affected. However, rising commercial premiums would feed through into higher household rates, industry experts say. The key Atlantic storm season starts next month. "For the last two years we have been lucky. Despite some highly active seasons – last year 12 hurricanes formed – none made landfall in the US. At some point our luck will run out."
After a string of costly disasters – the Japanese and New Zealand earthquakes and the Australian floods – Lloyd's insurers face claims totalling $3.8bn (£2.33bn), which ALREADY EXCEEDS TOTAL LOSSES FOR LAST YEAR. The industry as a whole has been hit by losses of at least $50 billion if the impact from recent US tornadoes is included. "Rates should rise. Prices are dangerously low at present. Clients may think they are getting a bargain. But ... the insurers who write unprofitable business are inevitably the first to collapse when disaster strikes."
The last time Lloyd's faced claims of this magnitude was in 2005, when hurricanes Katrina, Rita and Wilma ripped up swaths of the south-eastern US states. Insurance rates were already rising, which meant firms were better able to absorb the losses through their profitable lines. 2011 bears a closer resemblance to 2001, when the tragic events of 9/11 occurred at a time of softening premiums.
The recent catastrophes highlight how globalisation has changed the scope of a single event, the Japanese earthquake and the Eyjafjallaj√∂kull volcano eruption in Iceland a year ago may end up being viewed as the first systemic natural catastrophes. "What the earthquake and tsunami in Japan – and to an extent, the eruption of the Icelandic volcano last year – show us, is that risk travels further and faster. Insurers should be looking at how they build business continuity policies into the modelling of natural disasters. And risk managers may want to bring back the concept of a Plan B – for example spare stock in the warehouse, or alternative suppliers." "In the light of the more than $50bn in natural catastrophe losses incurred since the beginning of this year … it would be totally appropriate for rates to increase on a widespread basis."

**Whatever is not nailed down is mine.
What I can pry loose is not nailed down.**
Collis P. Huntingdon


LARGEST QUAKES -
This morning -
5.0 SOUTH OF JAVA, INDONESIA

Yesterday -
5/17/11 -
5.6 SOUTH OF JAVA, INDONESIA
5.1 OFF EAST COAST OF HONSHU, JAPAN
5.2 TONGA
5.0 HINDU KUSH REGION, AFGHANISTAN

VOLCANOES -

Eruption at NICARAGUAN volcano - Telica volcano spewed a massive cloud of gas and ash into the air Tuesday following several strong explosions. Material was ejected 1.2 kilometres into the air above the crater of the 1,060-metre volcano. A total of 50 explosions were recorded. Since May 9, Ineter has recorded 59 seismic shocks in the area, and Telica had ejected a large amount of sand on nearby cities since Friday. SIXTY NEARBY VILLAGES WERE EVACUATED as a precautionary measure. The volcano is located in Leon province, some 130 kilometres north-west of Managua. It last erupted in 1948.

JAPAN - Aso volcano alert level raised to 2. The Meteorological Agency on Monday raised the volcanic alert level for Mount Aso from 1 to 2, prompting local authorities in Kumamoto Prefecture to ban entry to areas within 1 km of the crater of Mount Naka, one of five peaks in the active volcano's central cone group. The alert includes a warning for rocks ejected from Mount Naka in the off-limits areas. The move came after the mountain belched a small amount of volcanic ash Friday and experienced a small eruption Sunday. On Monday, a small eruption and a 500-meter-high column of volcanic smoke were observed at around 10 a.m.

PHILIPPINES - 144 earthquakes recorded in Bulusan. Activity in Mount Bulusan in Sorsogon is being closely monitored by the Philippine Institute of Volcanology and Seismology (Phivolcs) after 144 seismic earthquakes were recorded in a span of 24 hours. Phivolcs said there is a possibility of a “phreatic” explosion in the next few days, similar to one that occurred on May 13. However, a magmatic explosion is not expected to occur. The monitored restiveness in Bulusan has prompted Phivolcs to maintain a Level 1 alert status. Reports of a second eruption were also dispelled by Phivolcs. The white smoke seen emanating from the volcano’s vents was merely steam.
Meanwhile, Alert Level 1 is still in effect in Mayon Volcano in Albay after Phivolcs recorded 6 seismic earthquakes.
Alert Level 2 is hoisted over Taal volcano. Six earthquakes were also recorded in Taal in the last 24 hours.
Phivolcs said there is a possibility that THE 3 ACTIVE VOLCANOES MAY ERUPT IN SUCCESSION, and noted that it happened in 2006, when Mayon, Bulusan and Kanlaon erupted

TROPICAL STORMS -
No current tropical storms.

EXTREME HEAT & DROUGHT / WILDFIRES / CLIMATE CHANGE -

CANADA - Freakish weather may be here to stay. Scientists finding more links with climate change. A wildfire swept through the town of Slave Lake, Alberta, on May 15, burning down about one third of the buildings.P They have 1,000 firefighters on the ground and 200 more on the way. Another 250 are being rushed in from B.C., Saskatchewan and Ontario. B.C. will also send in more aircraft to help the 100 helicopters and 20 waterbombers currently fighting more than 100 forest fires in Alberta. And, if history is any indicator, we'll be offered help from our American neighbours, too.
Not that they aren't busy coping with their own extreme weather events this spring including wildfires in the Midwest, a severe drought in Texas, flooding on the Mississippi and a record-breaking tornado season. Toss in the flooding in Manitoba and you're left wondering: What's going on with the weather?
At the Slave Lake fire: "The weather conditions there are FREAKISH - the perfect conditions for a firestorm." Freakish weather seems to be an apt description for what we're seeing across North America. That raises another question: Is this freakish weather the result of climate change?
Nobody can really say. No scientist can guarantee that any of these events are caused by human-induced climate change. Climate change is all about trends. However, the trends are consistent: the atmosphere is warming, the climate is changing and we are largely responsible through our burning of fossil fuels.
What scientists can tell us is that as the climate warms we'll experience more extreme weather events leading to floods, droughts, forest fires and crop failures. In other words, it's what we're seeing now.Freakish weather certainly falls within the potential scenarios laid out by scientists: droughts and forest fires in Alberta while Manitoba disappears under relentless flood waters; Texas suffering a dry spell while the Mississippi River overflows its banks.
That's just North America. Other areas of the world are actually experiencing more extreme weather which, besides causing droughts and floods, is helping spread disease and insects. If scientists are correct, it's only going to get worse. "There is a systematic influence on all of these weather events nowadays because of the fact that there is this extra water vapour lurking around in the atmosphere than there used to be say 30 years ago. It's about a four-per-cent extra amount, it invigorates the storms, it provides plenty of moisture for these storms and it's unfortunate that the public is not associating these with the fact that this is one manifestation of climate change. And the prospects are that these kinds of things will only get bigger and worse in the future."
Scientists are, in fact, slowly managing to find connections between some extreme weather events and climate change. A scientific paper published in Nature this year concluded that major rainstorms that flooded England and Wales in 2000 were made substantially more likely due to climate change. A study released by Queen's University on Monday says a catastrophic storm that hit Canada's arctic coast in September 1999 and caused the worst flooding in the area in 1,000 years can be linked to climate change. "Every model out there predicts this should happen. It's another sad example of things that are going to be happening - another example of the environmental effects of climate change."
Complicating the picture is that not everyone in the world is going to be a loser under climate change. While yields from wheat and corn crops have dropped worldwide the past 20 years, according to a new study, yields in North America haven't changed at all - making our grain farmers the winners in a world hit by higher food prices. The obvious losers, as usual, are those living in the Third World. However, until we know more about how climate change affects the weather, we don't know really know how many losers there will eventually be.

HEALTH THREATS -

Fields of exploding watermelons are creating havoc in China, and farmers overdosing their crops with growth chemicals are getting the blame. About 20 farmers around Danyang city in Jiangsu province have been affected, losing up to 45 hectares of melon.
The watermelons are described as "land mines" and they were exploding by the hectare in the Danyang area. Prices during the past year have prompted many farmers to jump into the watermelon market. All of those with exploding melons apparently were first-time users of the growth accelerator forchlorfenuron, though it has been widely available for some time.
Intact watermelons were being sold at a wholesale market in nearby Shanghai, but even those ones showed telltale signs of forchlorfenuron use: fibrous, misshapen fruit with mostly white instead of black seeds. Chinese regulations don't forbid forchlorfenuron, and it is allowed in the US on kiwi fruit and grapes. But the report underscores how farmers in China are abusing both legal and illegal chemicals, with many farms misusing pesticides and fertilisers.
Forchlorfenuron is safe and effective when used properly. The drug has been used too late into the season, and recent heavy rain also raised the risk of the fruit cracking open. But the variety of melon also played a role. "If it had been used on very young fruit, it wouldn't be a problem. Another reason is that the melon they were planting is a thin-rind variety and these kind are actually nicknamed the 'exploding melon' because they tend to split."
In March last year, Chinese authorities found that "yard-long" beans from the southern city of Sanya had been treated with the banned pesticide isocarbophos. The tainted beans turned up in several provinces, and the central city of Wuhan announced it destroyed three tonnes of the vegetable. The government also has voiced alarm over the widespread overuse of food additives like dyes and sweeteners that retailers hope will make food more attractive and boost sales. Though Chinese media remain under strict government control, domestic coverage of food safety scandals has become more aggressive in recent months, an apparent sign that the government has realised it needs help policing the troubled food industry. (photo & video)