ECONOMIC COST OF NATURE DISASTERS

Abstract

People will always be exposed to natural disasters, being it floods, droughts, storms or
earthquakes. Apart from human losses, enormous economic impacts are also terrifying.
Statistics tell us, that 95% of all casualties incurred during natural disasters occur in
developing countries. Wealthy countries experience lower death rate. However economic losses
are greater. When analyzing extent of nature disaster impacts, economic factors are important
indicators of future preventative and proactive measures. These impacts of nature disasters
considerably vary and it is rather difficult to predict them. Reinsurance and insurance
companies tend to overestimate economic forecasts of nature disaster impacts. After a nature
disaster strikes, we can usually hear scientific views, expressing economic perspectives, that
recovery of affected areas will bring faster economic growth, because of the increased
investments, renewal of equipment and facilities, etc. This is basically a theorem, that when
costs will grow and economy will profit. This could lead to a ridiculous conviction that
economic growth could be secured for instance by repeatedly damaging goods and things.