Posts tagged 'Natural Disasters'

Goldman Sachs on natural disasters, climate change and Justin Bieber (really)

This is the most awesome chart we’ve seen since Lisa’s Starbucks tax graphic: Goldman Sachs comparing the attention given to climate change, the eurozone crisis, and Justin Bieber. Read more

QBE shares fall on profit warning surprise

Australia’s biggest insurance company, QBE Insurance, shocked the market on Thursday by forecasting a 40 to 50 per cent fall in net profits for 2011 due to a late spike in catastrophe claims, particularly from the Thailand floods, reports the WSJ. Shares in QBE, which operates in 49 countries, tumbled more than 20 per cent after it said profits could be as low as half the $1.28bn reported for 2010.  ”Obviously I’m very disappointed with the numbers and the impact of the record number of catastrophes,” Chief executive Frank O’Halloran told investors on a conference call. ”Some are saying it’s the year that will not be repeated. We’re not assuming 2011 will not repeat itself in 2012.” The extent of the profit downgrade took investors by surprise despite the knowledge that 2011 was the worst year on record for insurers. QBE is due to publish its 2011 earnings in February.

Flooding fears for Bangkok grow

Thai Prime Minister Yingluck Shinawatra laid out a worst-case scenario as a deluge of water approaches Bangkok, telling residents to take precautions and expect low levels of flooding as a high tide nears, Bloomberg reports. “There is a possibility that the water will run through the center of Bangkok,” she said in a national address late yesterday. “The severity of the flooding will depend on the altitude of each area.” Water levels in parts of Bangkok may reach as high as 1.5m if a major breach occurs in dikes to the north of the capital, she said. In most places, flood depths may reach about 50cm, she said. About 10,000 factories north of Bangkok have been affected, disrupting the supply chains of companies including Apple and Toyota. The Thai cabinet declared October 27, 28 and 31 as holidays in 21 flood-hit provinces, including Bangkok, the Bangkok Post reports, to allow officials not involved in flood mitigation to stay home or travel out of Bangkok to other provinces. Flights to and from Don Mueang airport, which now mostly services domestic routes, were cancelled or postponed due to flooding.

Turkey quake death toll reaches over 200

More than 200 people were confirmed killed and hundreds more feared dead after an earthquake hit parts of southeast Turkey Sunday with rescue teams working through the night to free trapped survivors, Reuters reports. Early Monday, interior minister Idris Naim Sahin said the 7.2 magnitude quake killed 100 in the city of Van and 117 in the badly hit town of Ercis, 100 km (60 miles) further north. The death toll was expected to rise. Overseeing emergency operations in Ercis, Sahin said a total of 1,090 people were known to have been injured. Hundreds remain unaccounted for. Rescue efforts struggled to get into full swing following the quake, with electricity cut off as darkness fell on the towns and villages on the barren Anatolian steppe near the border with Iran.

Japan considering $13bn bond sale

Japan may sell about 1,000bn yen ($13bn) of bonds to fund rebuilding of areas stricken by the March earthquake, Bloomberg says, citing two government officials. The amount is less than estimates of analysts at UBS, Mizuho  and Nomura, which ranged between 1,200bn yen and 2,4oo yen, as Japan proceeds with its first bond sale dedicated to fund reconstruction from a disaster that has killed or left more than 19,000 missing.   Prime Minister Yoshihiko Noda is scheduled to convene an extraordinary diet session this week to discuss spending for the third supplementary budget and raising taxes to help pay for reconstruction costs.

Japanese manufacturing sentiment improves

Japan’s quarterly Tankan index of sentiment at large manufacturers rose to 2 in September from minus 9 in June, Bloomberg reports. The reading remains below the March quarter figure of 6, but a positive number means optimists outnumber pessimists. Japanese companies have been restoring operations after the quake and tsunami disrupted supply chains, with Toyota boosting production for the first time in a year in August and hiring temporary workers. The WSJ says the survey results could be good news for the Bank of Japan, which meets this week and has been under pressure to take further action on exchange rates as the yen continues to hover near a record high, creating uncertainty for the export-dependent country.

Lloyd’s claims US hinders disaster recovery

Lloyd’s of London, the largest reinsurer of US risk, has complained that the US government is too interventionist in the insurance market and could damage recovery efforts in the aftermath of national catastrophes, the FT says. A report to be released on Tuesday by Lloyd’s, the insurance market, argues that “[g]overnment intervention in insurance markets should be kept to a minimum”, although it claims that the trend is moving in the other direction. “We don’t believe that the US has the balance between industry and government intervention right, you have government intervention in federal and state level, it demonstrates this is not a sustainable way to proceed,” said Sean McGovern, director of North America and general counsel at Lloyd’s.

Irene’s aftermath

It feels somehow callous to be tallying Irene’s economic costs and potential effects on financial markets so soon after the storm passed us by.

So before proceeding, we’ll note that those of us in New York City would do well to remember that despite the mildness of what we experienced, the storm has taken quite a toll elsewhere in the US — killing at least 20 people, knocking out power in millions of homes and flooding large parts of the East Coast. The FT and WSJ have more. Read more

Irene prompts state of emergency in six US states

Irene batters Bahamas, heads for US east coast

Hurricane Irene is “pounding” the Bahamas, Bloomberg reports, and the strengthening Category 3 major storm is on a course that may take it near North Carolina this weekend and into southern New England early next week. Irene’s top winds reached 193km per hour as it churned the south-eastern Bahamian islands. Reuters says tourists fled the storm and major cruise lines cancelled Bahamas stops.  New York governor Andrew Cuomo ordered the state’s Office of Emergency Management to prepare for possible impact from Irene. Insurers kept a nervous watch in case Irene threatened wealthy enclaves such as the Hamptons. ”The exact center of the storm may actually stay pretty close to the coastline during the day on Saturday and then become a big threat for New England and perhaps Long Island … on Sunday,” US National Hurricane Center director Bill Read said, adding that North Carolina could get tropical storm-force winds as early as Saturday morning.

US earthquake forces evacuations

A 5.8 magnitude earthquake shook the east coast of the US on Tuesday afternoon, the FT reports, forcing the evacuation of buildings in Washington, including the White House and Pentagon, and rattling nerves as far away as Ohio and Toronto. The earthquake was centred at Mineral, Virginia, about 60km north-west of Richmond, the state capital, and was almost 1km deep, the US Geological Survey said. It was the largest in the state since 1897. Aftershocks were highly likely, the USGS added.  The unusual earthquake startled millions of people from Maine to Georgia, the NYT says. Tens of thousands of people were evacuated from office buildings, mobile phone services were strangled, and the quake led to disruptions in air traffic, halted trains, jammed roadways.

Devastating earthquake hits Japan

Japan has been reeling after an 8.9 magnitude earthquake hit the northeast of the country, causing many injuries, fires and a 12m tsunami along parts of the country’s coastline, the FT reports. The country was bracing for further waves at least 20 foot high. Countries around the Pacific have issued tsunami alerts, Reuters reports. An oil refinery outside Tokyo is in flames but no nuclear power stations are damaged, Al Jazeera reports. The Tokyo stock exchange’s systems were unaffected by the quake, although little time was left for stocks to respond to the damage before close of trading, the FT reports. The Nikkei was down 1.7 per cent at the close. The WSJ’s Japan Real Time will be liveblogging events.

Monetary policy in a time of natural disaster

Here’s a counter-intuitive policy suggestion, if ever there was one.

On Tuesday, after a 6.3 magnitude earthquake hit the New Zealand city of Christchurch, the swap market doubled-down on bets the country’s central bank would cut interest rates. Early estimates by prime minister John Key had the fatal quake causing about NZD $6-8bn (USD $4.5-5.97bn) of damage. A 7.1 magnitude earthquake in September, in nearby Canterbury, caused about NZD $8bn of damage — but there’s talk the Christchurch quake could cost as much as NZD $16bn. Read more

Lloyd’s profits halve as disasters mount

The worst first half-year for catastrophes since 1994 saw profits at Lloyd’s of London tumble by more than half to £628m, the lowest since the historic insurance market began interim reporting five years ago, reports the FT. A rare combination of disasters, including the Chilean earthquake, a winter storm in Europe and BP’s oil spill disaster led to global insurance losses of about $22bn, according to Munich Re. Lloyd’s continues to estimate that the claims exposure of its members to the Chilean earthquake is $1.4bn, while the bill for the BP oil spill is estimated at anywhere between $300m and $600m.