Magazin Risk

Schadenspiegel
Special feature issue

Risk factor of air
2008
Mnchener Rckversicherungs-Gesellschaft
Kniginstrasse 107
80802 Mnchen
Germany
Order number 302-05655
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1/2008, 51st year Losses and loss prevention
Dear Reader,
Air on the move is expensive for the insurance industry.
Windstorms can devastate whole regions and cause damage
costing billions. We have gathered together all you need to know
about this natural hazard in a special topic entitled Weather
phenomenon: Windstorm. We give you a picture of the loss
situation after Hurricane Wilma, which devastated the Mexican
holiday paradise of Yucatn in 2004 and led to business interrup-
tion losses whose adjustment was particularly tricky. And then
we show how arduous the salvage of a container vessel can be,
taking the example of MSC Napoli, which was stricken during
Winter Storm Kyrill in 2007.
The risk factor of air is not restricted to the windstorm hazard,
though. Cue: air pollution. Of the environmental media air, soil,
and water, it is the air that inuences our physical well-being
most intensively. What about the expenditure for asbestos-
related occupational diseases or immission-related respiratory
diseases? And is air a friend to aviation or rather an incalculable
risk? We interview a pilot and aviation underwriter and nd out
how dangerous turbulent air movements really are to air trafc.
Air can also catch re. In this, the fourth and last special feature
issue in our series Water, re, earth, air, our authors report
on the explosion hazard of combustible dust. They also address
the necessity of clean air in the production of semiconductors
and describe a defective wind turbine, whose rotor continued
turning at increasing speed until one of the rotor blades broke
off. Finally, this issue also contains our review of catastrophes
in 2007.
What do you think of this issue? Please write and tell us at:
schadenspiegel@munichre.com
Your Schadenspiegel team
Our publication portal at www.munichre.com is the place to go if you
wish to order past issues of Schadenspiegel since 2000 or download them
in pdf format.
Risk factor of air
Stormy, destructive,
dangerous
Editorial
2008
Kniginstrasse 107
80802 Mnchen
Germany
Supervisory Board
Dr. Hans-Jrgen Schinzler (Chairman),
Herbert Bach (Deputy Chairman),
Hans-Georg Appel, Holger Emmert,
Ulrich Hartmann, Dr. Rainer Janen,
Prof. Dr. Henning Kagermann,
Prof. Dr. Hubert Markl, Wolfgang Mayrhuber,
Kerstin Michl, Prof. Karel Van Miert,
Ingrid Mller, Prof. Dr. Heinrich v. Pierer,
Dr. Bernd Pischetsrieder, Dr. Jrgen
Schimetschek, Dr. Albrecht Schmidt,
Dr. Ron Sommer, Wolfgang Stgbauer,
Josef Sl, Judy V
Tel.: +49 (89) 38 91-0
Fax: +49 (89) 39 90 56
http://www.munichre.com
Responsible for content
Claims Management & Consulting:
Nicholas Roenneberg
Geo Risks Research/Corporate
Climate Centre
Prof. Dr. Peter Hppe
Marine: Thomas Artmann
Risk, Liability & Insurance:
Christian Lahnstein
Claims: Dr. Paolo Bussolera,
Arno Studener, Dr. Eberhard Witthoff
Space: Philip Ruari McDougall
Editors responsible
Daniela Przer
Corporate Communications
(address as given above)
Tel.: +49 (89) 38 91-93 84
Fax: +49 (89) 38 91-7 93 84
E-mail: schadenspiegel@munichre.com
Jutta Pschel
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Fax: +49 (89) 38 91-7 57 58
Editorial assistant
Michael Domke
ISSN 0941-0805
Picture credits
Cover: picture-alliance/dpa
pp. 2, 3: MR archives
p. 6: AP/Huntington Herald-Press/Andrew
Hancock
p. 10: U.S. Chemical Safety & Hazard
Investigation Board, Washington D.C.
p. 13: AP Photo/Stephen Morton
p. 14: Getty Images/John Fiordalisi
p. 18: Getty Images/Jim Reed
p. 22: MR archives (Possler)
p. 24: Getty Images/David McNeese
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Renewable energy
When the turning stopped:
Defective wind turbine
A rotor blade breaks off and is
wrapped around the nacelle.
Page 2
Fire risk
Dust explosions
When the air catches re
Combustible dust threatens industry.
Page 6
Interview
Aviation risks
Wind shear and wake vortices
Modern technology makes aviation
risks manageable.
Page 14
Environmental risk
Air pollution and liability
Health risks from asbestos and
emissions.
Page 44
Special risk
Clean air in semiconductor
production
Why re protection is so important
in this sector.
Page 50
Special topic:
Weather phenomenon:
Windstorm
Windstorm The most important
natural hazard worldwide
Loss prevention includes windproof
construction.
Page 19
Hurricane Wilma Adjustment of
business interruption claims
How is compensation calculated?
Page 32
Winter Storm Kyrill MSC Napoli
Difcult salvage of vessel and
containers.
Page 38
Major losses in 2007
Fires, aircraft accidents, natural
catastrophes.
Page 54
Readers letters
Page 57
Contents
1 Munich Re Schadenspiegel 1/2008
Renewable energy
When the turning stopped:
Defective wind turbine
It was four months before a grave error made while servicing
a 2.5-MW wind turbine developed into a spectacular loss. As so
often happens, it was the result of human error. The incident
not only stopped operations abruptly but also made it necessary
to carry out lengthy and extensive repairs.
Authors
Winrich Krupp, Markus von Stumberg, Munich
A spectacular sight: one of the
turbines rotor blades wrapped
around the steel tower. Human
error and technical defects were
the cause of this loss.
The wind turbine was part of a wind farm, where
twenty turbines were linked up together. All the
turbines had been working for about a year without
any particular trouble. So when the manufacturer
carried out a routine servicing job, there were no
adverse ndings. But in the process of servicing
one of the 2.5-MW turbines, a serious error was
made that was not detected at rst.
The loss event
It was not until four months later that an unfortu-
nate conuence with other cases of negligence and
adverse circumstances led to the loss occurrence.
What had happened?
On the day of the loss, the wind farms automatic
monitoring system registered a malfunction in the
high-voltage underground cable linking the wind
farm to a switching station about 10 km away. As
planned, it automatically shut down the turbines
and disconnected them from the grid.
Servo-motors turned the rotor blades into what
is known as the feather position. In this position,
the angle of attack is reduced to a minimum and
the rotors come to a standstill. Brakes were also
applied to secure the rotors in that position.
But the coordinated shutdown routine was only
performed by nineteen of the twenty turbines.
One of them failed to conform to the automatic
sequence and none of the rotor blades were turned
to the feather position. On the contrary, since
the wind turbine was disconnected from the grid,
the rotor turned at increasing speed, until nally
one of the three blades could not withstand the
pressure and centrifugal forces any longer. The
38-m breglass-reinforced plastic blade broke off
and was wrapped around the nacelle at the top
of the 80-m steel tower.
But that was not all. The unbalance caused by the
turning rotor and the resulting forces and torque
were transmitted through the tower to the foun-
dations. Owing to the comparatively high elasticity
of the material, the steel tower was practically
undamaged, but numerous cracks were later dis-
covered in the concrete foundations. They were
damaged so severely that they had to be demol-
ished and rebuilt.
The rotor and the two remaining blades had to be
replaced, too. Repairs were possible, however, on
the nacelle, which accommodates the generator,
gears, and bearings.
Result: Besides causing property damage of
around 2m, the accident put the turbine out of
service for several months.
The cause
The operator and the manufacturer were equally
intent on investigating the cause of loss as quickly
and precisely as possible not least in order to
prevent the same thing happening again.
Analyses of all the recorded operating data, the
service log, the plant software, and further investi-
gations both on-site and at the manufacturers
factory showed without any doubt that the person-
nel had switched off the monitoring alarms for
the routine servicing job (maintenance work) on
the wind turbine conducted months ago but had
inadvertently failed to reactivate them afterwards.
This error had far-reaching consequences because
nobody noticed a deep discharge of the off-line
battery system that powered the servo-motors for
adjusting the blades angle of incidence.
Cracks in the concrete left
no alternative but to remove
the foundations and rebuild
them.
Renewable energy

This deep discharge was found to have been
caused by a faulty slip ring, which has the job of
supplying the battery charger with power, and a
corroded contact in the chargers wiring. Conse-
quently, the automatic plant control system could
not drive the rotor blades into the feather position
during the power outage.
Learning from experience
If the safety system had been fully activated, the
controls would have identied all the technical
deciencies and would have shut down the plant
in good time. The damage to the turbine was def-
initely caused by the alarms being deactivated.
Even so, the turbine manufacturer responded in
exemplary fashion by introducing an array of
measures. The training of maintenance staff has
been further improved. Particular attention is now
given to providing them with even more in-depth
knowledge of the function and signicance of the
safety systems. A change in the monitoring system
software will prevent the deactivation of crucial
alarms for such parameters as overspeed, vibra-
tions, temperatures, and battery status.
Additional safety is provided by stricter password
controls and more narrowly dened authority levels
in the operating software that are now needed to
bypass monitoring and safety devices. Last but not
least, a remote query system automatically checks
the monitoring system for full operational capability
on a daily basis.
Conclusion
There is no doubt that manipulation of monitoring
and control systems whether during commission-
ing or in the operating phase always jeopardises
the safety of technical plant and equipment. When
there is no alternative to shutting down such sys-
tems, a maximum of care, knowledge, and reliabil-
ity on the part of the personnel responsible is
essential, because it is precisely this emergency
situation that often result in enormous losses.
Table 1 The components of a wind power plant
and the most frequent causes of loss
Source:
German Insurance
Association (GDV),
Berlin
Bearings and shafts
Wear and tear
Fatigue and cracks
Electric generator
Damaged windings
Asymmetry
Overheating and re
Gearing
Worn teeth
Misalignment
Overloading
Eccentricity
Lubricant
Rotor blades
Lightning stroke
Ice load
Fatigue and cracks
Unbalance
Tower
Vibrations
Fatigue and cracks
Way ahead of the rest:
Germany leads the eld with
a total installed capacity of
22,247 MW. Further develop-
ment of the offshore segment
may also have a positive
effect on the proportion of
energy generated by the
wind.
Source: Global Wind Energy
Council (GWEC), Brussels
Fig.1 Top ve countries: Installed capacity in 2007
Germany
United States
Spain
India
China
22,247 MW
15,145 MW
8,000 MW
6,050 MW
16,818 MW
0 5,000 10,000 15,000 20,000 MW
Renewable energy
Wind sector on the up
But the loss potential is increasing
Schadenspiegel team
The total installed capacity of wind power plants in
the EU is currently in excess of 48,000 MW, repre-
senting an increase of 300% in the European mar-
ket over the past ve years. The erce competition
among manufacturers has led to a continuous
increase not only in the number of plants but also
in the size and performance of the turbines.
Whereas European plants had an installed capacity
of less than 200 kW on average in 1992, the gure
for newly installed plants in 2006 was 1,800 kW.
Wind power is a risky business for the insurance
industry. Defective gears, overheated generators,
and worn bearings material fatigue and inad-
equate reliability of service and maintenance are
the main causes of losses. The higher their per-
formance, the more vulnerable the plants become.
What is more, in such a young class of business,
practical experience values only go back a few
years. But it is already certain that the costs of
settling machinery and machinery loss of prots
claims for wind farms will go on rising in the coming
years.
In order to keep losses to a minimum, more time
must be invested in the development and testing
of new plants, and higher quality standards are
needed for manufacture, maintenance, and repairs.
In addition to a detailed and comprehensive risk
assessment, insurers must encourage loss preven-
tion and loss avoidance. Service and maintenance
clauses should be an integral part of each insurance
contract and should specify how often the main
components are to be replaced or overhauled. Fig. 2 Schematic structure of wind turbine
Wind energy is converted into mechanical rota-
tional energy with the aid of rotors. Once used
directly by windmills for purely mechanical uses,
this energy is nowadays used to drive generators
that produce electrical energy.
The nacelle houses the hub, gearing, and gener-
ator on the horizontal rotor shaft. It is turned to face
the wind and ensures that the rotor takes optimum
advantage of the prevailing wind conditions.
Incidentally, the operation of wind farms only
makes technological and economic sense if the
wind reaches what is called the start-up wind
speed.
Hub, shaft,
and blade
pitch
mechanism
Rotor blade
Rotor locking brake
Gearing
Electrical
switchgear and
control system
Nacelle
Electric generator
Tower
Transformer
Rotor shaft
Foundations
Diagram: Munich Re
Renewable energy
Fire risk
Dust explosions
When the air catches re
It is estimated that not a day goes by in Europe without
a dust explosion. According to a current study from
the United States, combustible dust represents a danger
in any industrial facility given an adequate concentration
in the air and an ignition source. The explosive mix
costs insurers millions of euros.
Author
Dr. Alfons Maier, Munich
Large-scale re at Hayes Lem-
merz International, a vehicle
components supplier: an alu-
minium dust explosion was fol-
lowed by a reball with extreme ly
rapid re development.
The fact is that the smaller the particles and the
ner their distribution in the air, the greater the
explosivity of combustible dust. The ignition
source may be no more than a small electrical dis-
charge triggered by a plug being removed from
a socket or a hot metal component.
Dust explosion is a familiar hazard particularly
in the woodworking, metalworking, plastics
processing, chemicals, paper, agricultural, food,
and fodder industries. Precautions are taken to
prevent such events from occurring, and many
facilities go on producing for years and years
without any mishap.
Statistics on dust explosion losses
In spite of all the precautions taken, the agricul-
tural and food industries are particularly known
for large losses and a certain loss frequency.
Although large individual losses regularly occur
in other industries, too, meaningful statistics are
compiled and maintained only for individual elds
or branches of these industries and only for indi-
vidual countries. In most cases, it is almost impos-
sible to compare these statistics because they draw
on sources that differ in terms of the designation
and composition of dusts, facility types, and igni-
tion sources. In contrast, dust explosions in the
agricultural sector and coal dust explosions in
the mining industry, for instance are generally
well-documented.
What is a dust explosion?
In a dust explosion, a mixture of
dust particles ignites in the air. For
this to happen, the particles must
consist of combustible material and
be smaller than about 500 m, and
their concentration in the air must lie
between the lower explosion limit
(LEL) and the upper explosion limit
(UEL). For many types of food dust,
the LEL is between 30 and 60 g/m
3
,
the UEL between 2 and 6 kg/m
3
.
In addition, oxygen and an ignition
source with a sufcient supply of
energy must be present.
A distinction is made between pri-
mary and secondary dust explosions.
When a dust suspension in a con-
tainer, room, or system component,
for example ignites and explodes,
we speak of a primary dust explo-
sion. In a secondary dust explosion,
dust that has settled on the ground
or on other surfaces is stirred up by
the primary explosion and ignites.
A chain reaction follows: the pressure
wave emanating from the secondary
dust explosion can stir up further
dust deposits and cause further dust
explosions.
Dust explosions in the US agricultural sector
In the dust explosion statistics of the US agri-
cultural sector there are records of
490 explosions from 1900 to 1956 with losses
of US$ 70m,
of US$ 55m,
of US$ 169m,
of US$ 163m.
This averages out at about one event a month.
The annual number of events ranges from six to 18,
with individual loss amounts of between US$ 4m
and US$ 56m.
The long-term trend that emerges in the agricul-
tural sector is that dust explosions mainly occur in
elevators (e.g. chain or bucket elevators operating
as grain conveyors), fodder and our mills, and
silos.
Documentation of dust explosions in Germany
The institute for occupational health and safety of
the German statutory accident insurance institu-
tions has analysed 599 dust explosions that
occurred in different sectors of industry over a
period of about 25 years up to and including 1995.
Fire risk
Since 1785, when the rst dust ex-
plosion was documented in a our
warehouse in the Italian city of Turin,
explosions have occurred with regu-
lar frequency and have lost nothing
of their destructive force throughout
this time. In 1977, for example, ve
dust explosions occurred at US silo
facilities, killing 59 people and injur-
ing 49.
A our dust explosion at the Roland
Mill in Bremen, Germany, in 1979
caused property damage equivalent
to US$ 50m, with 14 people killed and
17 injured. Later that same year, it
was the turn of a feedstuff factory in
Lerida, Spain, leaving ten dead and
a badly damaged silo plant.
Although the design of grain eleva-
tors has improved considerably over
the years, explosions continue to
happen with disturbing regularity.
In 1997, twelve people died in a grain
elevator explosion in Blaye, France,
with property and BI losses amount-
ing to about 23m. Only 16 of the
44 elevator cells were still in their
original shape after the incident.
For safety reasons, however, the
remaining parts of the plant were
detonated as well.
In 1998, a mixture of dust and air
exploded in a large grain elevator
in Haysville, Kansas. Seven people
were killed and ten were injured,
with property and BI losses estimated
at several million US dollars. The
costs for rescue, re-ghting, and
subsequent operations amounted to
about US$ 850,000.
A terminal at the port of Puerto
General San Martn, Argentina, was
the scene of a severe dust explosion
in a silo in 2001, which killed three
people and injured seven. There was
a further explosion at a port terminal
only a month later, this time in Para-
nagu, Brazil. In this case, one of the
warehouses was a total loss. The
force of the explosion ung 300-kg
chunks of concrete several hundred
metres through the air, with some
roof sections landing up to 1 km
away. The grain continued burning
for almost three weeks.
In 2002, a dust explosion which
occurred when a vessel was being
loaded with soy beans in the port of
San Lorenzo, Argentina, destroyed
the entire terminal. Three people
died, 19 were injured.
The overview shows that
the facilities in which dust
explosions occur most fre-
quently are grain elevators
and hoppers. They account
for the largest proportion
of explosions particularly in
the wood and coal dust
groups (34.7% and 22.2%
respectively).
Review:
Major dust explosions in the agricultural and food industries
Fire risk
Fig. 1 The facilities most frequently affected
in the various dust groups
Dust groups
Total
Wood products
Paper
Coal/Peat
Food and fodder
Plastics
Metals
Others
0 10 20 30 40 50
Silos and hoppers 19.4%
34.7%
25%
22.2%
26.9%
15.4%
44.1%
18.6%
Proportion (%)
Mills
Silos and hoppers
Mixing plants
Dust-removal facilities and separators
Conveyors and elevators
Silos and hoppers
Mills
Fig. 1 shows the facilities most frequently affected
in the various dust groups (wood/wood products,
paper, coal/peat, food and fodder, plastics, metals,
and others). The most frequent ignition sources in
the various dust groups are the mechanical ones
(cf. Fig. 2).
New ndings:
Combustible Dust Hazard Study
The Combustible Dust Hazard Study of the US
Chemical Safety and Hazard Investigation Board
(CSB) from the year 2006 was the rst study to
incorporate losses from different sectors of indus-
try in one single examination. It shows that there is
an explosion hazard in all industries that handle
combustible dust.
The study included the sectors of food, rubber,
metal, wood, pharmaceuticals, plastics, paints and
coatings, synthetic organic chemicals, and other
industries that are not fully covered by the compre-
hensive safety regulations of the Occupational
Safety and Health Administration (OSHA). Agricul-
ture and coal mining were not included because
they are subject to the Grain Handling Facilities
Standards and the Mine Health and Safety Act
respectively.
Facilities like hospitals, the armed forces, research
institutes, and the transport sector were not con-
sidered either.
In the period from 1980 to 2005, 281 major dust
explosions are listed with a total of 119 dead and
718 injured, clearly showing that dust explosions
represent a major safety problem for industry.
People were injured or killed in as many as 71% of
the loss events in different branches of industry.
The explosions happened in 44 federal states and
involved a variety of materials. On average, there
were ten dust explosion events every year in this
period. More than half of the events were recorded
in the following sectors: food (25%), wood (15%),
chemicals (12%), and metal (8%). The dust explo-
sions were caused by wood dust (24%), food dust
(23%), metal dust (20%), and plastic dust (14%).
Source of Figs. 1 and 2:
Jeske, Arno; Beck, Hartmut:
Documentation of dust
explosions Analysis and case
studies (in German), Haupt-
verband der gewerblichen
Berufsgenossenschaften
(HVBG) (ed.), St. Augustin,
BIA-Report 11/1997.
The chart shows the most
frequent ignition sources
in the various dust groups.
Mechanical ignition sources
are the most common except
in the coal/peat group.
Fire risk
Fig. 2 The most frequent ignition sources
in the various dust groups
Dust groups
Total
Wood products
Paper
Coal/Peat
Food and Fodder
Plastics
Metals
Others
0 10 20 30 40 50
32.7%
35.9%
50%
25.4%
35%
29.2%
30.8%
49.4%
23.7%
23.7%
Proportion (%)
Pockets of embers
Electrostatic discharge
Electrostatic discharge
Polyethylene dust exploded
at West Pharmaceutical
Services, Inc. The production
section for pharmaceutical
products was completely
destroyed.
A series of phenol resin dust
explosions devastated the pro-
duction line at CTA Acoustics,
Inc. Substandard cleanliness was
one of the reasons why the resin
dust was able to ignite.
Fire risk
Loss examples
Three large dust explosions in the United States in
the year 2003, with a total of 14 people killed and 81
injured, were among the reasons for the CSB carry-
ing out the Combustible Dust Hazard Study. On the
basis of the cases examined, it is possible to deter-
mine some of the typical factors that lead to explo-
sion losses.
West Pharmaceutical Services, Inc.
Six people were killed when polyethylene dust trig-
gered an explosion at West Pharmaceutical Ser-
vices, Inc., Kinston, North Carolina, on 29 January
2003. The plant, which was completely destroyed
in the incident, produced rubber pharmaceutical
goods. The production process, which involved
dipping strips of rubber into a mix of polyethylene
powder and liquid and then drying them in air,
resulted in ne polyethylene dust being released.
In line with the stringent hygiene requirements
applying to pharmaceutical enterprises, the pro-
duction area was cleaned regularly. Nevertheless,
ne combustible plastic dust accumulated above
the suspended ceiling. Eventually it ignited, result-
ing in a dust explosion.
Some of the staff had known about the deposits,
but they had not been sensitised to the dangers of
dust explosions. The material safety data sheet for
the polyethylene mix did not contain any warnings
about possible dust explosions either. What is
more, the companys safety review process failed
to take into account the danger of explosion during
this stage of production.
Although the plant had been inspected by the
OSHA, the local re authority, and insurance and
hygiene experts, the dust explosion hazard had not
been identied. The electrical lines in the ceiling
area were therefore not designed adequately.
The CSBs conclusion is that the explosion could
have been prevented or at least restricted if the
National Fire Protection Associations standards for
combustible dust had been observed. According to
press reports, the insured loss totalled US$ 41m
(property: US$ 32m, BI: US$ 9m). West Pharma-
ceutical Services, Inc. was faced with further costs
in the million dollar range primarily in the form of
its deductible, investigation costs, legal expenses,
and environmental costs.
Fire risk
CTA Acoustics, Inc.
On 20 February 2003, a series of dust explosions
occurred at CTA Acoustics, Inc. in Corbin, Kentucky,
which produces insulation materials for the motor
industry. The outcome: seven people killed, 37
injured, and a devastated production facility. Dur-
ing production, bre glass mats were impregnated
with phenol resins. On the day of the explosion, a
tempering furnace was kept open because of a
problem with the temperature. Workers who were
cleaning the production area near the furnace had
probably stirred up combustible resin dust, which
immediately ignited. According to the CSB, the
dust explosion is very likely to have been due to the
design of the facility, working practices, and prob-
lems with on-site housekeeping. Moreover, the
production building was not designed to minimise
secondary explosions: the area of at surfaces on
which dust can settle had not been reduced, for
example, and there were no re walls separating
the production areas from each other.
The CSB also found that the safety data sheet for
the used resin did not give a clear enough indica-
tion of the dust hazard. What is more, the compe-
tent authorities had not imposed any special
requirements regarding the dust explosion hazard,
nor had the re protection authority inspected the
facility. The insurers had not recognised the danger
of the phenol resin dust exploding either.
In this case, too, the CSB concluded that if the
National Fire Protection Associations housekeep-
ing standards had been observed and re and
explosion barriers erected, the explosions could
have been prevented or minimised.
According to press reports, protracted negotiations
were followed by a jury assigning the main respon-
sibility for the explosions to the company supply-
ing the resin, obligating it compensate CTA Acous-
tics, Inc. for the sum of US$ 123m. The reasoning
behind the decision was that the supplier had not
provided adequate safety instructions for handling
the resin and had not drawn attention to the explo-
sion hazard.
Hayes Lemmerz International
The third major loss occurred in Huntington,
Indiana, on 29 October 2003. In this case, it was
aluminium dust that exploded. One of the staff
was killed, several were injured. The explosion
occurred in the production area where cast alu-
minium and aluminium-based alloys for vehicle
wheel rims are made. Aluminium scrap is crushed,
conveyed to the processing area, where it is
dried, and nally fed into the smelting furnace.
During the conveying and drying processes, com-
bustible aluminium dust is emitted into the air. The
dust is separated in a dust collector, and it is here
that the explosion probably occurred. The likely
explanation is that the collector had not been venti-
lated or cleaned sufciently and was also too near
the processing area. The explosion propagated
through the exhaust-air ducts, nally producing a
large reball that broke out in the furnace area.
The CSB ascertained that the dust collector was
not of dust-explosion-proof design. Furthermore,
no consideration had been given to the possibility
of dust explosions being transmitted along the
exhaust-air ducts. And there were other problems
as well. When the company had incorporated
the scrap-processing and dust-collecting system
into the existing facility, it had failed to implement
change management procedures. These might
have led to the danger being recognised. Further-
more, the dust deposits on the girder structure of
the manufacturing shop had not been removed
and they triggered a secondary explosion, which
destroyed the shop roof.
Another failing was that the employees had not
been instructed on the dangers of dust explosions
due to aluminium dust, whilst the authorities had
not drawn attention to the dust explosion hazards
during past inspections.
Here again, the CSB came to the conclusion that
if the National Fire Protection Associations stand-
ards for combustible metals had been observed,
the explosion could have been prevented or at
least minimised.
Incidentally, the CSB recommends further research
into aluminium dust as a basis for long-term
improve ments in the aluminium industry with
regard to dust explosion protection for dust separ-
ators.
Results: Combustible Dust Hazard Study
The Combustible Dust Hazard Study found that the
respective standards of the National Fire Protection
Association ought to have been observed in all of
these three cases. This alone can ensure that secur-
ity procedures are sufcient to reduce or even rule
out the risk of a dust explosion.
The factors leading to the damage in these three
large losses and in other cases examined by the
CSB include the following:
Facility management, ofcial bodies, occupa-
tional safety and health experts, and insurance
companies failed to identify the dust explosion
hazards and to recommend appropriate pro-
tective measures.
Housekeeping was inadequate. In most produc-
tion plants, there was an accumulation of danger-
ous, combustible dust.
Dust lters were not adequately designed to
withstand dust explosions or had not been given
proper maintenance.
Production processes were changed without a
sufcient examination of the possible dangers.
It is remarkable that, according to the CSB, only
about half of the safety data sheets for known com-
bustible materials are adequate sources of infor-
mation for users or employees on the dangers of
dust explosions. What is more, almost half (41%)
of the 140 safety data sheets for combustible dusts
did not contain a dust explosion warning. Only
seven made any reference to the National Fire Pro-
tection Associations standards on the prevention
of dust explosions.
The CSB study also contains a number of other
recommendations. These have already been taken
on board by the competent authorities in some
cases. It is to be hoped that their implementation
will gradually lead to improved dust explosion
protection in industry.
Fire risk
Sources
Jeske, Arno; Beck, Hartmut:
Documentation of dust explo-
sions Analysis and case stud-
ies (in German), Hauptverband
der gewerblichen Berufsgenos-
senschaften (HVBG) (ed.), St.
Augustin, BIA-Report 11/1997.
Schoeff, Robert W.: U.S. Agri-
cultural Dust Explosion Statis-
tics, Kansas State University in
cooperation with FGIS-USDA,
20 March 2006.
U.S. Chemical Safety and Haz-
ard Investigation Board (ed.):
Investigation Report Combust-
ible Dust Hazard Study, Report
No. 2006-H-1, November 2006.
Fire risk
A recent dust explosion loss at
the production facility of a US
sugar manufacturer. Sugar dust
is assumed to have exploded.
Conclusion
As far as the risk of dust explosion is concerned,
the insurance industry has so far concentrated
primarily on large losses in the agricultural and
food industries. However, the CSBs current study
makes it clear that all branches of industry in which
combustible dust occurs are equally exposed.
The institute for occupational health and safety of
the German statutory accident insurance institu-
tions, the current Combustible Dust Hazard Study
published by the US Chemical Safety and Hazard
Investigation Board, and Munich Res loss experi-
ence all indicate one thing: the risk factors that lead
to dust explosions are similar throughout the
world. And they need to be given more attention
with a view to attaining effective loss prevention.
Otherwise, we must continue to reckon with further
deaths, injuries, and large property and BI losses.
The devastating explosion probably of sugar
dust at the Imperial Sugar Company in Port Went-
worth, Georgia, on 7 February 2008 shows that the
subject of combustible dust has lost nothing of
its topicality. Fourteen people were killed and a
number were injured. The damage is considerable.
Munich Re is certain that companies, authorities,
and insurance companies must now do more than
ever to ensure that dust explosion risks in industry
are identied, controlled, and minimised.
Aviation risks
Wind shear and wake vortices
Air is a friend to aviation, countered Thomas Endriss,
aviation underwriter and pilot, when we asked him about
air as a risk factor in air travel. But we dig deeper: And
what about wind shear, wake vortices, and air pockets?
Interview
Thomas Endriss, Munich
The greatest risk in aviation
is human error. Wind only
becomes dangerous when
it occurs unexpectedly
in the form of wind shear,
for example.
Endriss: Although wind shear and wake vortices
can lead to problems, the main risk in aviation is
and remains human error. People make errors,
draw wrong conclusions, take incorrect decisions
and even the best technology offers no safeguards
against that. It is not usually one single cause that
leads to damage or accidents but rather a chain
of events.
Schadenspiegel: So how dangerous is wind
shear, then?
Endriss: Its only dangerous when it comes un-
expectedly, when the wind changes direction very
suddenly, as during a thunderstorm, for instance.
Aircraft are now protected against this by wind
shear detection systems, which were introduced
about eight years ago. They measure the air
density using radar and give an acoustic warning
as soon as pressure conditions become abnormal.
Modern cockpit systems can even supply visual
clues to the threatening danger from shifting
winds. By the way, most airports frequently
affected by wind shear have such safety systems.
Schadenspiegel: And what does the pilot have
to do then?
Endriss: Simply increase speed on approach to the
runway and come down at a higher residual speed.
Because whenever possible, aircraft are own
into the wind for landing. If an aircraft has already
reached landing speed, say about 160 km/h, and
is just about to touch down with 20 km/h of head-
wind, its speed will suddenly drop relative to air
motion as soon as the wind turns to 20 km/h of tail-
wind, for instance. The aircraft consequently
crashes because there is no more lift available.
Schadenspiegel: And what about during take-off?
Endriss: During take-off, the pilot can either wait
for the wind shear to subside or simply y around
it with the help of modern technology. Air trafc
control or the cockpit instruments provide so-
called vectors to navigate aircraft around the dan-
ger area. By the way, wind shear does not usually
represent any danger in-ight. An average passen-
ger jet ies at a speed of 850880 km/h, for exam-
ple, so that if the wind speed changes by 100 km/h,
the aircraft merely gets a bit slower or a bit faster.
The passengers do not notice anything at all, apart
from what might be a quite unpleasant shaking
of the aircraft.
Schadenspiegel: So technology makes wind shear
controllable. Can you give us any examples of
accidents happening in spite of this?
Endriss: Fortunately, there are only a few. One of
these happened at Toronto Pearson International
Airport in Canada on 2 August 2005. A brand-new
Air France Airbus A340 was on approach to
Toronto during a huge thunderstorm, along with
many other aircraft. While the other aircraft con-
tinued to circle in holding patterns, the A340 pilot
decided to land, but approached at much too high
a speed. He presumably wanted to prevent the air-
craft from getting too slow because of the shifting
thundersqualls. Theoretically, as I just explained,
this was the correct thing to do. However, the tail-
wind was far from being as strong as expected. So
the aircraft touched down far too late and could not
stop on the wet runway. It rolled a further 200 m
into a ditch, broke in two, and burst into ames.
Fortunately, all the passengers managed to escape,
and only a few of them had slight or minor injuries.
Schadenspiegel: And this again highlights the
critical role of the pilots. When you assess an air-
line, how important is their training for you?
Endriss: This is very important. As the number of
risks is very limited, with roughly 600 airlines
worldwide, personal contact plays a leading role.
When we inspect the airlines ight training centres
and simulators, their risk managers go along with
us. And we want to know how ight training is
organised. But we also talk about numbers and
about how the eet will develop in the future
away from old aircraft, for example, and towards
top modern models with state-of-the-art cockpit
technology. And, of course, we inspect the aircraft
and maintenance facilities. What do the hangars
look like? Are they clean or cluttered up with all
sorts of things?
Schadenspiegel: And which Munich Re employees
are responsible for assessing the airlines?
Endriss: Our underwriters have different qualica-
tions, which all go to make up our expert know-
ledge. They come from a wide variety of profes-
sions, ranging from insurance specialists with a
pilots certicate and a maintenance licence to
aviation engineers and lawyers.
Aviation risks
Schadenspiegel: Let us come back to wind shear.
Do you also enquire whether early-warning
systems are on board?
Endriss: Of course, especially if we do not know
an airline well. And if we know that airports are
involved which are known for wind shear con-
ditions. But almost all airlines have wind shear
detection systems nowadays.
Schadenspiegel: At which airports is this particu-
larly important?
Endriss: One of the notorious airports is Dallas Fort
Worth International Airport in Texas, for example.
Denver International Airport in Colorado may also
be affected by wind shear because the Rocky
Mountains have a weather phenomenon similar
to the one we know in the Bavarian Alps: the foehn.
What is more, all areas are affected where heavy
precipitation can occur out of the blue. This is pri-
marily the case in the Far East, at airports in Singa-
pore, Malaysia, and Indonesia.
Schadenspiegel: What about airports like Santa
Catarina on the Portuguese island of Madeira?
The landing strip is partially built on columns, on
a steep slope directly beside the sea.
Endriss: This airport is extremely difcult to
approach. Due to its position in the southeast of
a hilly island, the wind comes from the wrong
direction, so to speak, from northeast to north-
west. Because of the air masses being conducted
over a mountain directly next to the landing strip,
eddies are generated. The wind forms a kind of
rotor, right there where the landing strip is built.
What is more, until recently the airport only had
a relatively short runway, so that it was impossible
to approach at a higher speed. However, the run-
ways were extended in 2000, albeit with some
difculty. Schadenspiegel even had a report on
this case, I believe.
Schadenspiegel: Yes, thats right: in the 2/2000
issue. Cracks had formed in the columns, leading
to an insured loss of about 1.4m.
Endriss: Even with the extended runway, though,
pilots are only allowed to land at this airport if they
have received special training on the simulator.
Lufthansa requires this training twice a year, for
example.
Schadenspiegel: Another question concerns wake
vortices. What are they exactly?
Endriss: Wake vortices are generated on the trail-
ing edges of the aircraft wings. Now how does
this happen? The form of the wings accelerates
the air streaming over their upper surface. This
results in negative pressure, which gives the air-
craft lift. The air owing beneath the wings is not
accelerated as much. When the faster air from
the upper surface meets that slower air from the
lower surface, it produces turbulence. Vortices are
generated at the wingtips and revolve like small
tornadoes, which get bigger and bigger as they
move away.
Schadenspiegel: Something like the rings you
make when you throw a stone into the water?
Endriss: Exactly. But wake vortices also produce air
resistance. This has recently led to the increasing
use of what are known as winglets, little turned-up
airfoils that are mounted on the wingtips. They are
not there for optical reasons, but to reduce the air
resistance. The result is that less energy is needed,
and the aircraft uses less jet fuel.
Cross-section of a thunder-
storm cell producing strong
wind and hail. The arrows
in orange represent the air
streams, the thin black
arrows indicate the possible
tracks of hailstones. Wind-
storm damage and wind
shear may occur along the
squall line.
Source: Diagram based on
Kurz, Manfred: Synoptische
Meteorologie, Deutscher
Wetterdienst (ed.), Offen-
bach am Main, 1990
Fig. 1 Wind development during thunderstorms
Tropopause
Altitude (km)
km 10
Updraught
region
Downdraught region
8 6 4 2 0 2 4 6 8 10
Squall line
Updraught
region
40C
0C
Hail Rain
10
5
Track direction
Aviation risks
Schadenspiegel: Do wake vortices pose a danger
to air trafc?
Endriss: Not to the aircraft that produces the wake
vortices but to the aircraft following behind. And
this is particularly the case during take-off and
climbing, since aircraft are much slower in these
phases than in the cruising phase and therefore
more susceptible to wake vortices. At cruising
speed, they are no problem at all. I only know of
one serious accident involving an aircraft that ew
into the wake vortices of another aircraft. This
was on 12 November 2001, when an American
Airlines Airbus A300 crashed over the New York
City district of Queens.
Schadenspiegel: What happened?
Endriss: It was a sunny, windless day, so the wake
vortices stayed put and were not blown away by
the wind as usual. There are standard routes that
aircraft have to adhere to during take-off, because
of noise protection regulations, for instance. So
the Airbus A300 used exactly the same route as
an aircraft that had taken off in front of it. Only a
little lower. As a result, it got into the wake vortices
of the preceding aircraft and went into an extreme
sideways roll. In such situations, the manufactur-
ers instructions specify exclusive use of the
ailerons, but the pilot, presumably on instinct,
attempted to counteract the roll using the rudder.
As it was not designed to cope with such a load,
however, the rudder broke. The aircraft went out
of control and crashed. All the passengers were
killed.
Schadenspiegel: Another case of human
error, then.
Endriss: Im afraid so. It wasnt the wake vortices
alone that caused the crash. And the interval
between the two aircraft taking off was in line with
the regulations, too. There was simply an unfavour-
able interplay of different factors: the weather,
wake vortices, and the pilots incorrect response.
Schadenspiegel: One last question: what effect
do air pockets have?
Endriss: I nd this word amusing. Air is perman-
ently in motion. It rises when it is warmed up by
the sun and falls when it cools down, e.g. behind
clouds. To maintain altitude in these permanently
changing conditions, aircraft must y contrary to
these air movements. However, if you y from a
sunny area into a shady one, the air suddenly stops
rising and the aircraft loses height. All this happens
relatively fast and, due to mass inertia, the passen-
gers are lifted from their seats for a short time.
They feel like theyre falling into a hole.
Schadenspiegel: But has this ever made an
aircraft fall from the sky?
Endriss: No, never. And this has nothing to do with
turbulence either, which is more likely to result
in the aircraft shaking. Nevertheless, both as a pilot
and as a passenger, my recommendation is as
follows: if you are asked to fasten your seat belt,
then please do so. In this way, you can be sure that
nothing will happen, even if the plane gets into
heavy turbulence or air pockets.
Wake vortices are generated
on the trailing edges of the
wings. The vortices at the
wingtips rotate like small tor-
nadoes, getting bigger and
bigger as they move away.
They can become dangerous
particularly for following air-
craft in the take-off or climb-
ing phase.
Fig. 2 Wake vortices
Diagram: Munich Re
Aviation risks
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Special topic: Weather phenomenon:
Windstorm
We all talk about the weather but what do
we know about the wind? Where does it come
from and what effective precautions can be
taken to prevent windstorm damage to build-
ings? Read about the destruction a hurricane
caused in a tourist area or what happened
when a container ship ran into a winter storm.
We also present a chronology of devastating
windstorm catastrophes worldwide from
1970 to 2007.
More than just a mild breeze:
Wind causes more damage
than any other natural hazard
turbulent storms leave their
marks all around the globe.
Special topic: Weather phenomenon: Windstorm
Winter Storms Daria, Lothar, and Kyrill in Europe,
Typhoon Mireille in Japan, Hurricane Andrew
and Hurricane Katrina in the United States: just
a few of the major windstorm catastrophes of
recent years that have devastated whole areas,
destroyed forests and coastal resorts, and
cost billions of euros. The frequency and dimen-
sion of the losses have had a major impact on
the insurance industry around the globe.
Windstorm is the most important natural hazard
of recent decades, in terms of the frequency of
loss events, the total expanse of the areas affected,
and, above all, the scale of the damage caused.
The insurance industry has consequently had to
carry higher and higher losses due to windstorm,
the natural hazard responsible for about 79% of
the US$ 370bn (2007 values) which the insurance
industry had to pay for major natural disasters
between 1950 and 2007 (see Fig. 1).
What do we know about the wind?
Meteorological observations of windstorm events
have been documented for centuries for almost
as long, in fact, as written history. On the other
hand, instrumental measurements of wind elds
have only existed for a relatively brief one hundred
years. Moreover, since wind elds are very sensi-
tive to the coarseness of a region topography,
vegetation, built environment it is very seldom
possible to compare them with each other over
relatively long observation periods. This is one of
the reasons why there are few areas with indicative
wind statistics and windstorm hazard zoning to
date. What is more, the windstorm hazard in moun-
tainous areas may be subject to extreme small-
scale changes due to topographical features like
river valleys. However, routine meteorological
monitoring networks are usually too large-meshed
to pick up local changes in wind elds or conned
windstorm phenomena like tornadoes and thun-
dersqualls.

Windstorm The most important natural
hazard worldwide
Author
Ernst Rauch, Munich
As fast as the wind
Observations of the wind present another prob-
lem, too: the winds speed increases with its
height above the ground usually following
power law. However, it also reacts strongly to
the coarseness of the earths surface. In short,
the smoother the surface, the less the wind cur-
rent is decelerated. For this reason, wind speeds
are on average much higher over the sea than
over a surface covered with vegetation or an
urban area.
Far ahead of the rest. Historically, windstorms
have been the most important natural hazard for
the insurance industry even more than earth-
quakes, volcanic eruptions, or oods. The loss
frequency, the scale of the damage caused, and not
least the high windstorm insurance penetration
are all responsible for this.
Weather-related
events
Windstorm
Flood
Temperature
extremes
Geological
events
Earthquake, tsunami,
volcanic eruption
Fig. 1 Great natural catastrophes, 19502007:
Global distribution of insured losses
Chart: Munich Re
10%
4%
7%
79%
Munich Re Schadenspiegel 1/2008 19
Since the height at which the wind is measured
plays such a decisive role, a standard reference
height of 10 m above the ground has been agreed
on for the purposes of comparison by the World
Meteorological Organization.
Turbulent risk assessment
For an accurate assessment of the windstorm risk,
however, the insurance industry needs even more
information. One of the essential parameters for
the extent of damage is the duration of wind stress.
Many losses are only caused by a multitude of
wind attacks or load changes, which cause ma -
t erial fatigue and nally failure.
Besides speed and duration, the direction of the
wind is also decisive. Severe changes in direction
can inuence the extent of loss considerably, if
trees with their root system and buildings with
their specic load design cannot cope with them.
The wind is turbulent. The wind speeds of short
gusts are much higher than the average, with the
gust factor the ratio of gust speed to mean wind
speed usually being between 1.2 and 1.5. In very
rough terrain, however, values exceeding 2 may
also be reached. The Beaufort Wind Scale denes
windstorm strength as the ten-minute mean value.
Last but not least, the turbulent nature of the wind
leads to its kinetic energy uctuating very strongly,
too. Known as the energy spectrum of the wind,
this property has a decisive impact on the extent
of damage to trees and resonating structures, par-
ticularly bridges, towers, or chimney stacks.
Windstorms from tropical to wintry
In meteorological terms, windstorms can be essen-
tially divided into four classes: tropical cyclones,
extratropical storms (winter storms), regional
storms (including monsoon storms), and local
windstorms (tornadoes, thunderstorms/hail-
storms). The world map of windstorms on pages
2829 present the typical tracks and origins of
the various windstorm types.
Fig. 2 Cross-section of a tropical cyclone (hurricane)
At least 27C
3
1 2
4 Heavy rain Shower
Diagram: Munich Re
Hurricanes get their energy from the
evaporation of warm surface water.
This schematic drawing shows how
warm air rises in the central eyewall
of the hurricane (1). This is where
the strongest condensation of water
vapour occurs, consequently pro-
ducing extreme precipitation. Out-
side the eyewall (2) and in the eye of
the storm (3) a windless, dry zone
in the centre of the hurricane the air
cools and streams back downwards.
Over the sea surface (4) it takes on
heat and moisture again providing
additional fuel for the atmospheric
thermal engine. Over land areas,
however, the system loses energy
fast when the addition of water
vapour stops and friction with the
ground sets in.
The catastrophe potential of tropical cyclones is
exceptionally large in many coastal regions due to
the high concentration of values in such areas,
their high recreational value, and the associated
inux of people. This had a major impact on the
insurance industry again in 2005, when Hurricane
Katrina caused original insured losses of around
US$ 62bn.
Extratropical storm (winter storm)
Extratropical storms are different from tropical
storms not only in terms of their areas of formation
and their tracks but also, and above all, in terms of
their intensity and geographical size. They form in
the transition zone between subtropical and polar
climate zones (roughly between latitudes 35 and 70
north and south of the equator).
When outbreaks of cold polar air meet up with sub-
tropical warm air masses, extensive low-pressure
vortices are generated. The storm intensity within
these vortices increases in proportion to the tem-
perature difference of the two air masses. It is high-
est in late autumn and winter, when the oceans are
already cold but the polar air is still warm hence
the designation winter storm. Their formation is
shown in Fig. 3.
Tropical cyclone
Tropical cyclones attaining hurricane force (Force 12
on the Beaufort Scale, i.e. 118 km/h) in the Atlantic
and Northeast Pacic are referred to as hurricanes;
they are called cyclones in the Indian Ocean, the sea
area around Australia, and the South Pacic, and
typhoons in the Northwest Pacic. Below hurricane
force, i.e. in the 62117 km/h range (811 on the
Beaufort Scale), they are referred to as tropical
storms.
They can extend over large areas with wind
speeds exceeding 250 km/h and in individual cases
even 300 km/h. Coastal regions and islands
between latitudes 10 and 40 north and south of
the equator are particularly affected. The wind eld
is usually 100500 km in diameter.
Tropical cyclones quickly get weaker inland, which
is primarily due to friction with the earths surface
and the reduced energy input from water vapour.
Nevertheless, as the huge masses of water taken
up over the warm sea usually fall as rain on the
windward side of mountains, this may result in ex-
treme oods and landslides even far inland. Fig. 2
on page 20 shows how a tropical cyclone forms.

L
H
L
H
H
L
H
Fig. 3 Development of an extratropical low-pressure system (winter storm)
H = High-pressure
system
L = Low-pressure
system
Cold front
Warm front
Diagram: Munich Re
L
An air mass boundary forms between
cold polar air in the north and warm
subtropical air in the south. The heav-
ier cold air starts moving southwards
close to the surface. At the same time,
the warm air advances northwards
at higher levels, with the result that
the pressure in the centre of the turbu-
lence falls. The faster cold air catches
up with the warm air, the two mix
leading to the formation of vortices.
Maximum wind speeds are 140200 km/h,
although winter storms can also reach speeds far
in excess of 250 km/h in exposed coastal locations
and on higher mountains. Extratropical storms
may have wind elds up to 2,000 km wide.
Ice storms and snowstorms (blizzards) are further
types of extratropical storm. The damage caused
by ice or snow load may as in the case of the
other extratropical storms, where high wind
speeds are the main cause of damage lead to
losses amounting to tens of billions.
An ice storm lasting from 28 January to 4 February
1951 covered huge areas of the United States
from New England to Texas with a layer of ice
up to 10 cm thick. In terms of its geographical
size, it was probably the largest ice storm of the
20th century.
Regional storm and monsoon
In meteorological terms, regional and monsoon
storms are mainly classed as orographic storms.
What they have in common is that they are formed
by air masses rising on the leeward side of moun-
tains. The air cools down in the process, condenses
when humidity has passed satur ation point which
sometimes results in heavy rain and rushes down
into the valleys from mountain ridges or pass sum-
mits.
In the case of regional storms, too, wind speeds
increase with the difference in temperature and
height of fall. If orographic winds additionally
combine with a large-scale stream of air moving
in the same direction, speeds of up to 200 km/h
are possible.
The best-known examples of regional storms
are the Bora on the Adriatic Coast of Dalmatia,
warm winds like the foehn in the Alps, the Mistral
in the lower Rhne Valley, and the Chinook in the
Rocky Mountains. But such orographic winds
may occur in all mountains regions of the world,
particularly on the edge of temperate climate
zones. Their formation is so closely linked to the
respective topography that it is common for them
to occur repeatedly at the same place and with
the same wind direction.
These wind systems are most intensive on the
extremities of the Antarctic and Greenland, where
the extremely cold air of the central plateaus
plunges to sea level sometimes by more than
3,000 m through narrow glacier valleys. In the
process, it frequently reaches and maintains
hurricane force for long periods of time.
The monsoon is a separate windstorm phenom-
enon of regional expanse. When the great land
surface of Asia heats up under the almost vertical
rays of the sun in early and mid-summer, it draws
in warm and moist air masses from the Indian and
Pacic Oceans. Incidentally, without this circula-
tion, the entire Indian subcontinent and adjacent
regions would be uninhabitable deserts.
The squall line phenomenon. Before
a thunderstorm, the air that has been
warmed by the sun becomes lighter
and rises. On its way upwards, it
cools, water vapour condenses, and
clouds form the now colder air is
heavier and nally sinks. If it falls very
fast, it forms a visible squall line. The
hanging cloud parts are the typical
manifestation of colder, moister air
sagging into the warmer, drier layer
of air beneath.
Local storms (tornado, thunderstorm, hailstorm)
Thunderstorms are the result of vertical circulation
in the atmosphere. Cold, heavier air sinks, causing
the warm air in its path to rise. Especially when
thunderstorms form on a cold front, the air streams
down to the earths surface from a height of several
kilometres and shoots below the warm air in
tongue-form. This results in the typical squall line,
cf. photo on page 22.
As in the case of orographic storms, potential
energy is converted into kinetic energy. Gusts are
always particularly intense when a thunderstorm
is accompanied by heavy rain or hail. As a result of
the precipitation, the surrounding air also cools
down and is nally dragged down, too. Near
ground level, the stream of air veers into a horizon-
tal plane, steering raindrops or hailstones into a
sloping trajectory sometimes at an angle of more
than 45 from the vertical.
Tornadoes are small-scale storms that form in
intense thunderstorm systems when cold, dry
air passes over warm, moist air masses. Given
suitable temperature differences, the cold air can
plunge downwards in a violent whirling motion
similar to the action of liquid when a bottle is
emptied quickly. On the edge of the whirling wind,
the warm air moving up replaces the cold air
moving down, condenses and thus makes the
whirling wind visible from the outside, as in
Fig. 4.
Condensation often forms at the centre of the tor-
nado, too, however. If the air pressure suddenly
falls by as much as 10% below normal, this also
leads to cooling and to droplet and cloud formation
as a result of over-saturation. The rotation of the
tornado funnel is determined, as a rule, by the
rotation of the earth, as with tropical cyclones.
Tornadoes therefore turn clockwise in the southern
hemisphere and anti-clockwise in the northern
hemisphere. However, there are also isolated
records of tornadoes rotating in the opposite direc-
tion.
The average width of tornado funnels is about
100 m and the average track length a few kilo-
metres, although widths of more than 1,000 m
and track lengths of up to 300 km have also been
observed. The maximum possible wind speed
on the edge of the funnel is estimated to exceed
500 km/h the highest speed of all windstorm
types. Tornadoes usually have an average wind
speed of just over 100 km/h and are most common
between latitudes 20 and 60 north and south
of the equator.
As in the case of tropical cyclones, there also are
other names for tornadoes: in Japan they are called
tatsumaki and in Germany Tromben. Waterspout
is the term used when they form over water sur-
faces.
Of all wind systems, it is tornadoes
that attain the highest wind speeds.
They are generated whenever strong
vertical air movements occur in the
atmosphere and are therefore always
accompanied by intensive thunder-
storm cells. The schematic represen-
tation on the left demonstrates the
air ows in and around a typical tor-
nado. Vortex formation is strength-
ened particularly by the cold, dry
air falling onto the warm, moist air
below.
Fig. 4 The formation of a local storm (tornado)
Cold, dry air
Warm, moist air
Diagram: Munich Re
Wind is moved air. If a structure is in
its path, the wind ows around it.
Dynamic pressure is generated on
the side facing the wind, whereas
suction forces are generated on the
side facing away from the wind. On
the corners and edges of the struc-
ture, vortices are generated whose
pressure or suction forces can be
many times greater. The size, fre-
quency, and intensity of these vorti-
ces depend on both the wind speed
and the shape of the structure around
which the wind is owing. Generally
speaking, the less regular the struc-
ture, the greater the vortex formation.
Fig. 5 Encircled by the wind
Pressure
Wind
Suction
Diagram: Munich Re
Turbulence
This photo of an Oklahoma
City motel taken after a tornado
in 2003 shows how severely
the wind can damage roofs and
faades. The damage is due to
pressure and suction forces
and to vortices which form in
the air eld especially on the
corners and edges of a struc-
ture cf. Fig. 5.
The calm before the storm. Now is the time to
take precautions!
The best way to reduce windstorm damage in the
medium to long term or even to prevent it altogether
is to improve the resilience of buildings and their
components to wind. It also requires making appro-
priate changes to infrastructure installations like
bridges and means of transport (e.g. vehicle aero-
dynamics).
For the purposes of loss minimisation, all structural
components must be built to withstand the add-
itional loads generated during a storm blowing at
design wind speed. Both static and dynamic forces
must be considered, because during a windstorm
buildings are exposed to extremely volatile streams
of air that are constantly changing in strength and
direction, as Fig. 5 demonstrates.
Bad weather calls for good architecture
The inuence of the wind on buildings is not one-
sided: wind ow is also inuenced by the buildings
themselves. The vortices coming off the edges and
corners of a building intensify the load on it.
The resonance behaviour of the building also plays
a role. If it is an elastic structure with little damping,
strong vibrations can develop even when wind
speeds are relatively low. The constant trend
towards making buildings bigger and lighter has
led to them being increasingly susceptible to
vibrations.
What can be done to slow down or even halt this
loss-producing development? Here are some typ-
ical causes of damage and the corresponding loss
prevention measures:
Roofs
The roof is the part of the building that is most fre-
quently affected by windstorm damage. The rea-
sons for this are:
Wind speed increases with height. Sharp or pro-
truding roof edges generate wind vortices.
Roofs, chimney stacks, roof superstructures, and
aerials, etc. are often not integrated securely into
the loadbearing structure of the building and/or
do not receive proper maintenance.
In order to avoid windstorm damage to roofs in
the long term, the following measures are recom-
mended:
When there is extensive roof cladding (e.g. corru-
gated sheet metal), screw it to the load-bearing
construction. Otherwise, fasten the individual
roof elements or roong tiles exibly.
Anchor the roof construction in the masonry
using wall anchors, screws, and metal straps.
Simple nails are not suitable.
Building aerodynamics: Roofs that are too at or
too steep or protrude too far should be avoided.
This will also reduce the pressure and suction
forces of the wind.
Prudent gardening: Sufcient distance will pro-
tect the building from windstorm damage caused
by falling trees.
Supplies of materials: Replacement roof panels
or membranes make it possible to carry out fast
repairs and provide (at least temporary) protec-
tion against the elements.
Exterior walls, faades
Damage to the exterior walls of buildings usually
occurs only in particularly intense windstorms.
However, losses are accumulating due to the
increasing use of expensive and at the same time
sensitive wall-facing materials. Unlike conven-
tional faades with masonry or plaster, these are
easy prey for the wind a really alarming develop-
ment. It makes no difference whether they involve
insulation against heat loss and moisture penetra-
tion (in the form of glued or screwed materials,
metal plates, or pressed plates) or whole faades
made of light metal or plastics.

Precautions that can be taken to prevent damage to
exterior walls and faades:
Anchor insulation and faade elements in the
loadbearing structure of the building.
Avoid soft faade materials in areas exposed to
hail.
Mount large-scale glass elements exibly.
Ensure that the building is securely anchored in
the foundations.
Protecting mobile facilities against bad weather
Scaffolding, cranes
Scaffolding and cranes are typical storm-prone
temporary structures, as are air domes (covers
without any supporting structure, which are kept
stable by internal pressure) and tents. Strangely
enough, inadequate attention is often paid to
anchoring these structures in the ground, with the
result that scaffolding or cranes not only suffer
severe damage themselves during a storm but also
cause damage to parked cars or other buildings in
the immediate vicinity if they fall down. People
are frequently injured, too.
The following loss prevention measures are
available:
Secure the scaffolding to the buildings both
during construction and in the course of repair
work.
Replace worn, corroded, or other unsafe com-
ponents and make regular controls.
In the case of cranes that run on rails, anchor
the chassis to the rail foundation with bolts and
latches.
Unlock the jib on a tower crane to permit exible
alignment to the wind.
A general rule regarding cranes is always to
check the bearing capacity of the ground, par-
ticularly in view of the severe one-sided load
during windstorms. If necessary, they should
be secured with a cable-tensioning system.
Germany
Besides the DIN series 1055 men-
tioned below, Germany has no ob-
ligatory standards or regulations
governing the prevention of wind-
storm damage to buildings.
DIN 1055-4 was introduced by the
building authorities and describes
the inuence of wind loads on build-
ings, their components, and exten-
sions, and regulates the calculation
methods. Additional German docu-
ments in this series like Eurocode 1
on the subject of wind load impact
may be found at
www.eurocode-online.de
VdS Schadenverhtung GmbH has
published various leaets, some
of which are available in English.
They can be obtained for a minimal
charge at the VdS website:
www.vds.de
United States
The American Society of Civil Engin-
eers has published structural stand-
ards for protection against natural
hazards, ASCE Standard No. 7-05,
in Minimum Design Loads for Build-
ings and Other Structures.
www.asce.org
Quite a number of supplements
have been incorporated in the Florida
Building Code in response to the
devastating hurricane seasons of
recent years, in which Florida was
particularly affected.
www.oridabuilding.org
The American Association for
Wind Engineerings website offers
a number of publications on the
subject of wind and windproof con-
struction. These include not only
structural guidelines and standards
but also publications dealing with
wind energy and hurricane risk
assessment.
www.aawe.org
Worldwide
The Journal of Wind Engineering
and Industrial Aerodynamics pub-
lished monthly by the International
Association for Wind Engineering
is written for architects, civil engi-
neers, and meteorologists through-
out the world. The ISSN number
is 0167-6105.
Storm-proof construction
Further information and regulations
The graph of expected losses as
a function of occurrence probability
or return period clearly shows that
hurricanes represent the most ex-
pensive windstorm hazard in the
United States. This is due, on the one
hand, to the very high wind speed
they can attain over large areas and,
on the other, to the concentration
of values in US coastal regions like
those along the Gulf Coast or on
the southeast coast (e.g. Florida).
These two factors are not encoun-
tered in this combination either
in Japan or in Europe.
Motor vehicles, caravans
The insurance industry is always hit by extensive
losses in the motor own damage sector when there
is a major windstorm event. In regions with a high
property insurance density, the sum total of motor
own damage losses frequently amounts to 510%
of the total insured loss. This rate may also be con-
siderably higher in emerging markets. Losses are
primarily the result of falling trees or branches,
roof panels, or faade components.
Possible prevention measures:
Put vehicles in the garage when there are storms
or severe weather warnings.
When there is a danger of heavy storm gusts,
close particularly exposed road sections and
bridges to large lorries and caravans.
At camp sites, secure caravans with cables.
In hail-prone areas, protect car depots with hail
nets.
A general rule is to repair damage quickly in
order to avoid corrosion and other consequential
damage.
Windstorm losses can be reduced considerably or
even prevented by precautionary measures. The
most effective way to prevent losses, however, is
to incorporate the factor of wind resistance in the
planning of infrastructure installations and all
buildings and their individual components. Land-
use restrictions in heavily exposed areas like those
on the coast are also of special signicance.
Stormy days ahead
There is no doubt that losses from windstorm
events are going to increase worldwide, both from
hurricanes in the United States and from winter
storms in Europe. Fig. 6 provides a striking indica-
tion of expected losses as a function of their occur-
rence probability. How does this increase come
about? It is due to the increasing concentration of
values and also to the changes in weather patterns
as a result of global atmospheric warming. There is
hardly any line of insurance that has such a high
loss potential (in terms of single loss events) as
windstorm insurance.
Since the attitudes of the public, industry, and the
authorities are signicantly inuenced by insur-
ance terms and conditions, one of the insurance
industrys tasks is to advocate more effective pro-
tection. What measures are suitable in individual
cases? What prices must be charged and what
terms and conditions are needed to cover the risk
adequately? These are all questions that need to be
answered.
The suitable time to prepare for a changing risk
situation is the period of calm before the storm,
because when the storms have already begun,
it is too late, as past events have so frequently
demonstrated.
Hurricane USA Windstorm Europe Typhon Japan
US$ bn
300
250
200
150
100
50
100 200 300 400 500 600 700 800 900 1,000
Years (return period)
Fig. 6 Windstorms worldwide: Expected losses as a function
of their occurrence probability
Source: Munich Re
World map of windstorms: from tropical to wintry
Tropical cyclone (hurricane, typhoon, cyclone)
Safr-Simpson Hurricane Scale
m/s
32.742.6
42.749.5
49.658.5
58.669.4
69.5
km/h
118153
154177
178209
210249
250
mph
7395
96110
111130
131155
156
Knots
6482
8396
97113
114134
135
Force
1
2
3
4
5
Australian Tropical Cyclone Severity Scale
m/s
25.034.5
34.647.0
47.162.3
62.477.6
77.7
km/h
90124
125169
170224
225279
280
mph
5677
78105
106139
140173
174
Knots
4767
6891
92121
122150
151
Force
1
2
3
4
5
Extratropical storm (winter storm)
Beaufort scale
m/s
00.2
0.31.5
1.63.3
3.45.4
5.57.9
8.010.7
10.813.8
13.917.1
17.220.7
20.824.4
24.528.4
28.532.6
32.7
km/h
01
15
611
1219
2028
2938
3949
5061
6274
7588
89102
103117
118
mph
01
13
47
812
1318
1924
2531
3238
3946
4754
5563
6472
73
Knots
01
13
46
710
1115
1621
2227
2833
3440
4147
4855
5663
64
Force
0
1
2
3
4
5
6
7
8
9
10
11
12
40N
0
40S
Local storm
(tornado)
Extratropical
storm
(winter storm)
Extratropical storm (main tracks)
Tropical storm (main tracks)
Tornadoes (main areas of occurrence)
Tropical
cyclone
(hurricane)
Extratropical
storm
(winter storm)
0 km/h 100 km/h 200 km/h 300 km/h 400 km/h 500 km/h
Local storm (tornado)
TORRO Scale
m/s
1724
2532
3341
4251
5261
6272
7383
8495
96107
108120
121134
km/h
6186
87115
116147
148184
185220
221259
260299
300342
343385
386432
433482
mph
3954
5572
7392
93114
115136
137160
161186
187212
213240
241269
270299
Knots
3347
4863
6480
81100
101119
120140
141162
163185
186208
209233
234260
Force
0
1
2
3
4
5
6
7
8
9
10
m/s
17.832.4
32.550.2
50.370.3
70.492.2
92.3116.3
116.4142.3
142.4169.4
km/h
64116
117180
181253
254332
333418
419512
513610
mph
4072
73112
113157
158206
207260
261318
319379
Knots
3563
6497
98136
137179
180226
227276
277329
Force
0
1
2
3
4
5
6
Typical tracks of the various storm types
Tropical cyclones usually develop in the tropical and
sub-tropical Atlantic or Pacic and then make landfall.
Winter storms, on the other hand, move as low-pressure
vortices in the transition zone between cold polar air
and subtropical warm air masses. Tornadoes are devas-
tating small-scale storms, measuring between a few
dozen and several hundred metres in diameter. Individ-
ual scales are needed in order to classify the various
windstorm types because of the different wind speeds.
Signicant historical windstorm events
Tropical cyclones
1970: Cyclone/storm surge, Bangladesh
1974: Cyclone Tracy, Australia
1983: Hurricane Alicia, USA
1991: Cyclone/storm surge, Bangladesh
1991: Typhoon Mireille, Japan
1992: Hurricane Andrew, USA
1998: Cyclone 03A, India
1998: Hurricane Mitch, Middle America
2005: Hurricane Katrina, USA
Extratropical storms (winter storms)
1976: Winter Storm Capella, Europe
1990: Winter Storms Daria, Vivian, and Wiebke, Europe
1999: Winter Storms Anatol, Martin, and Lothar, Europe
2007: Winter Storm Kyrill, Europe
Local storms (tornadoes, thunderstorms/hailstorms)
1984: Hailstorm, Germany
2003: Tornado outbreak, USA
40N
0
40S
Tropical cyclone
(typhoon)
Tropical cyclone
(cyclone)
Diagram: Munich Re
Fujita Tornado Scale
Chronology of the most devastating storms
from 1970 to 2007 (all loss amounts in original values)
Tropical cyclones
1991 Cyclone and storm surge,
Bangladesh
A good 20 years after the 1970 catas-
trophe, Bangladesh is again hit by a
severe storm. Almost 10% of the popu-
lation are made homeless in April 1991
by a cyclone with wind speeds reach-
ing 250 km/h.
1991 Typhoon Mireille, Japan
Massive damage to buildings and crops
are caused by Mireille as it crosses
Japan in September 1991. Generating
insured losses of US$ 7bn, it is the
costliest windstorm for the insurance
industry in the history of Japan.
1992 Hurricane Andrew, United States
At US$ 17bn, the largest insured loss
until then worldwide. Also the last loss
event for a number of primary insurance
companies: Hurricane Andrew forces
them into liquidation.
1998 Cyclone 03A, India
One of the strongest cyclones to hit India
in 25 years, 03A causes losses costing
US$ 1.7bn in June 1998 and is also
Indias most expensive storm of all time.
This high sum was due to the many
industrial facilities that were hit: rener-
ies, tanks, ports, and wind farms.
1998 Hurricane Mitch, Middle America
In October/November 1998, Mitch is
the tragic climax of an exceedingly
active hurricane season in the Atlantic.
The death toll is the highest for over
200 years: 9,700 people in Middle
America lose their lives. Honduras and
Nicaragua are worst hit.
2005 Hurricane Katrina, United States
In August 2005, Hurricane Katrina lays
waste to parts of the Gulf Coast and
the city of New Orleans. The overall
loss of US$ 125bn is the highest ever
caused by a hurricane. The insured loss
of US$ 62bn is also a record, making
Katrina the costliest storm to date for
the insurance industry.
1970 Cyclone and storm surge,
Bangladesh
In November 1970, about half a million
people in Bangladesh are killed in the
most deadly cyclone on record. After
the catastrophe, emergency shelters are
extended and early-warning systems
improved.
1974 Cyclone Tracy, Australia
A Christmas that will remain a terrible
memory for Australians: on 24 and
25 December 1974, Cyclone Tracy devas-
tates large parts of Darwin, the contin-
ents northernmost city.
1983 Hurricane Alicia, United States
In August 1983, Alicia becomes the rst
windstorm to cause losses exceeding a
billion dollars: an overall loss of US$ 3bn,
including insured losses of US$ 1.5bn.
And for the rst time ever, the National
Hurricane Center issues information on
the landfall probability: a milestone in
windstorm forecasting.
Extratropical storms
1999 Winter Storms Anatol, Martin,
and Lothar, Europe
Three winter storms, later to be
known as the December Storms,
develop into an immense natural
catastrophe. More than one million
trees are destroyed by Lothar alone.
With knowledge on occurrence
probabilities of major windstorm
losses having improved, Lothar
does not come unexpectedly for
the insurance industry in spite of
a loss amount of 5.9bn.
2007 Winter Storm Kyrill, Europe
Large parts of western and central
Europe and even areas in eastern
Europe are hit by Kyrill between 18 and
20 January 2007: more than a million
people are without electricity for some
time. Flights are cancelled, ferry and
rail connections halted, and numerous
roads closed. The insured loss: 4.5bn.
1976 Winter Storm Capella, Europe
Storm surge, dyke breaches, snow-
drifts. In January 1976, Winter Storm
Capella felled 1.5 million trees and
caused insured losses amounting to
around 600m.
1990 Winter Storms Daria, Vivian,
and Wiebke, Europe
A series of windstorms sweeps over
Europe in the mild winter of 1990.
At 4.4bn, Daria is the most highly
insured winter storm loss to date
and the connection between extreme
events and climate change is now
addressed for the rst time.
Local storms
2003: Tornado outbreak, USA
In May 2003, US meteorologists
register 562 tornadoes, a new record.
A state of emergency is declared in
many parts of Kansas and Missouri.
The paths of destruction left by the
cyclones are 400 m wide in some
places. The insurance industry is left
with a bill of US$ 3.2bn.
1984 Hailstorm, Germany
On 12 July 1984, a hailstorm causes an
overall loss of 1.5bn, of which only about
half is insured. It is Germanys biggest
ever hail loss. The main impact of this
hailstorm, with a hail track of 300 km and
hailstones the size of tennis balls, is felt
in Munich.
Hurricane Wilma Adjustment of
business interruption claims
Authors
Richard Gross, Cunningham Lindsey Mexico SA de CV, Mexico City,
Josef Probst, Munich
The purpose of business interruption insurance is
to restore policyholders to the nancial position
they were in before a loss event as if it had never
happened. However simple this principle may
sound in theory, putting it into practice is fraught
with difculty, as the example of Hurricane
Wilma illustrates. This cyclone caused the largest
insured catastrophe loss in the history of Mexico:
US$ 1.75bn.
Hurricane Wilma made landfall on 21 October 2005
on the island of Cozumel of the east coast of the
Mexican peninsula of Yucatn. It remained almost
stationary over the area for more than 48 hours,
wreaking devastation on Cozumel and along the
Riviera Maya up to the city of Cancn.
Once the storm had moved on en route to Florida,
the true dimensions of the catastrophe became vis-
ible: many tourist facilities and hotels were badly
damaged. The main types of damage were crushed
glass faades, shattered roofs, and damaged build-
ings swamped by corrosive salt water. The most
notable evidence of Wilmas devastation was the
almost complete loss of Cancns trademark, the
ne white sand on its beaches: this phenomenon
was last observed though less drastically after
Hurricane Gilbert in 1988. Wilma caused the largest
insured catastrophe loss in the history of Mexico:
US$ 1.75bn.
Insurers and reinsurers were faced with a complex
claims situation, since the affected area had
already been stricken by Hurricane Emily just four
months before. Much of the damage to hotels and
tourism infrastructure had not been fully repaired
prior to the impact of Wilma, resulting in complica-
tions in terms of both the identication of add-
itional damage and, in particular, the overlap in
business interruption indemnity calculations.
Many hotels in Cancn worked tirelessly to re-open
for business with a minimum of delay, overcoming
initial problems with shortages of suitably qualied
contractors and building materials. Hotel owners
who had taken out BI coverage following their
experience with Hurricane Gilbert, realised it would
take many months before tourists could be tempted
to return to the area in sufcient numbers. As a
result, many hotels took the opportunity to carry
out extensive remodelling and refurbishment work,
some even completely converting and rebranding
their facilities.
Yucatn is a peninsula separating the
Gulf of Mexico from the Caribbean.
It is 600 km long and 450 km wide and
lies just a few metres above sea level.
Its east coast, the Riviera Maya, has
been transformed into a holiday para-
dise since development began in the
1970s. The main resort, Cancn, has
become a magnet for tourists and cur-
rently boasts more than 24,000 hotel
rooms. The large international chains
have hotels located along Boulevard
Kukulkan on a narrow strip of land
with ne white sandy beaches.
Map: Munich Re
Cozumel
Fig. 1 The tourist paradise of Yucatn
Valladolid
Tizimn
Campeche
Mrida
Cancn
Yucatn
Quintana
Roo Campeche
R
i
v
i
e
r
a

M
a
y
a
Hurricane Wilma hits the
Mexican peninsula of
Yucatn. In just 15 hours,
a harmless tropical storm
has developed into the
strongest hurricane since
records began in 1851.
After Katrina and Rita, Wilma was the
21st tropical cyclone and the 13th
hurricane to strike in 2005 this was
even more than in the record years
of 1933 and 1969.
With peak gusts of up to 350 km/h,
it sped over the open sea, where its
central pressure dropped to 882 hPa
a level observed for the rst time
ever in the Atlantic region.
Wilma formed southwest of Jamaica,
moving across the Caribbean in a
northwesterly direction to the north-
ern tip of Yucatn. When it made
landfall on the island of Cozumel off
the east coast of Ycatan with aver-
age wind speeds of 230 km/h, the
cyclone was roughly the size of
Germany.
Yet oddly enough, Cozumel remained
sunny and perfectly calm for about
two hours below the eye of the
storm owing to its low forward speed
of about 6 km/h and its diameter of
about 50 km.
As the people were in extreme dan-
ger, the Mexican authorities launched
a massive evacuation effort, with
those tourists who were unable to
ee the area in time taking refuge in
the many emergency shelters that
were set up.
Claims handling
Separating the costs of remodelling from the costs
of repairing hurricane damage was often an ardu-
ous job for insurers. It was even more complicated
to determine what portion of losses was actually
part of an insured business interruption. The only
factor of relevance here is the length of time
needed for repairs and not the time required for
additional remodelling work. Some hotel operators
argued that the interruption was not prolonged by
the remodelling work, since this was undertaken
concurrently with the hurricane damage repairs.
However, this did not apply in the case of large-
scale remodelling and conversion work.
A greater point of conict, however, related to how
the loss of revenue covered under the BI cover was
to be calculated. The method usually employed
compares the revenue expected during the period
of interruption with that achieved during the corres-
ponding period in the previous year, thereby elim-
inating any deviations from previous years gures
due to seasonal trends.
In this way, insurers can determine what factors
may have the effect of reducing revenue compared
with previous years and thus of lowering the level
of compensation e.g. the loss of attraction in a
particular region. Shortfalls resulting from such
factors are not covered by standard business inter-
ruption insurance. On the contrary, BI cover only
attaches as a consequence of physical damage to
the policyholders assets. It does not apply to the
loss of the attractive sandy beaches in Mexico to
which a number of policyholders referred: they are
namely federal property.
Conversely, claimants are entitled to include in the
calculation of the indemnity payable circumstances
that have an impact on their business. An example
is the upward trend the majority of hotel owners
incorporated in their revenue projections for calcu-
lating their BI losses. In the case of Wilma, they
estimated their revenue and occupancy data on the
SS: Safr-Simpson Hurricane Scale
Wind speed in km/h
Tropical storm
(< 118 km/h)
SS1 (118153 km/h)
SS2 (154177 km/h)
SS3 (178209 km/h)
SS4 (210249 km/h)
SS5 ( 250 km/h)
Dallas

Houston

New Orleans

Mexico City

Guatemala City

Miami

Fig. 2 Track of Hurricane Wilma
Chart: Munich Re
basis of historical statistics and also applied a fac-
tor reecting the fact that Cancn had attracted
increasing numbers of tourists in recent years. The
growing volume of domestic tourism in the low
season in particular had reduced the difference
between peak and low season occupancy rates to a
marked degree. The hotels shortfall in revenue
was then calculated as the difference between the
hypothetical revenue and the actual revenue. To
determine the insured loss, a gross prot factor
was applied to the resulting loss of revenue.
Some international loss adjusters challenged this
upward trend. With a view to reducing the pro-
jected revenue to a realistic level, they applied a
negative factor that reected Cancns loss of
attraction for tourists due to Hurricane Wilma. In
view of the situation in Cancn following the
storm, it was clear that even hotels that were not
damaged themselves were unlikely to achieve their
prior revenue levels let alone improve on them as
projected. There had simply been too much media
coverage of the destroyed beaches, and numerous
tourist facilities (water parks, bars, night clubs, and
restaurants) were damaged. And as described
above, standard BI policies do not cover shortfalls
in revenue caused by such a loss of attraction.
Furthermore, a review of hotel revenue and occu-
pancy statistics for the previous year in Cancn
revealed a signicant reduction in business in Sep-
tember 2004 due to the (ultimately unfounded) fear
that Hurricane Jeanne would strike Cancn. So if
the mere apprehension of a hurricane strike pro-
duced a reduction in hotel revenue, the loss would
surely be even greater if the region were really to
be devastated even if the hotels involved were
not damaged themselves.
The ne sand for which
Cancns beaches are famous
has simply disappeared after
Hurricane Wilma (picture
above). The water reaches
the promenade. About a
year after the devastation,
the beach is open to tourists
again (picture below).
Particular aspects of BI policies Interpretation of
the policy wording
The basic principle of BI covers is that they are
tied to the property cover on which they are based.
In the interpretation of BI wordings, however,
there are often differences of opinion and conicts
especially in the case of large and costly losses.
This is particularly true in markets where this form
of cover is not widely known.
In the event of a dispute, this problem is aggra-
vated if
there are few, if any, instances of local court
decisions relating to comparable cases that may
serve as a guide;
the policy does not use reliable and established
wordings;
markets and countries are involved with particu-
larly consumer-friendly jurisdiction.
In addition to claims being unrealistic, legal ad -
visors often use existing or ostensible gaps in the
policy terms and conditions as a means to obtain
maximum indemnication. When cases go to
court, decisions must be expected from judges
who are not experts in this special eld. These
aspects can be extremely important and should
be considered both in a companys acceptance
policy and in the assessment of individual risks.
The BI sum insured should be calculated with due
precision for each separate risk. Unless covers are
restricted (e.g. limited to xed costs or increased
costs of working), the sum insured should reect a
business gross prot (xed costs plus net prot).
Policyholders should be informed particularly well
on the scope of the BI cover and the possibilities
it offers. Ideally, policyholders, insurers, and
brokers should agree from the very start on what is
to be done in the event of a loss occurrence, which
includes planning lines of action, specifying loss
minimisation measures, and nominating compe-
tent potential loss adjusters. Arrangements of this
nature not only make it possible to respond to a
loss event quickly but also prevent potential con-
icts from the outset. There is no doubt that a rela-
tionship of close cooperation between the parties
involved can and should have a loss-minimising
effect particularly in the case of BI covers.
The shopping centre
La Isla after Hurricane
Wilma (picture above) a
scene of severe damage.
One year later, the centre
has been rebuilt (picture
below).
Indeed, statistics on Wilma revealed that passen-
ger arrivals at Cancn International Airport were
well down on previous years and that overall occu-
pancy levels were lower even at hotels that had
suffered little or no damage (Fig. 3). On the
strength of such data, some loss adjusters con-
sidered it equitable to apply the adjustment factor
in the calculation of business interruption indem-
nication. This was ercely opposed by many policy-
holders, and a number of Mexican insurers were
not very supportive either. Consequently, the factor
was not applied to the majority of business inter-
ruption claims, many of them being settled on the
basis of projections even before the indemnity
period actually expired.
Conclusion
A lack of clarity in the policy wordings often hin-
dered attempts to arrive at settlements that were in
accordance with the spirit and intention of the BI
coverage, with the result that many companies felt
compelled to accept claims they considered were
strictly in excess of the indemnity payable.
For that reason, insurers intending to write BI
business must ensure that there are no ambiguities
in the policy wording: after all, the factual position
to which BI covers relate is extremely complex,
involving many factors that possibly inuence each
other.
As a result of such lack of clarity in policy wordings,
the tendency is for the adjustment process to
become unduly complicated and conictive, with
the ultimate result that the settlements paid by
insurers are often in excess of that intended by the
underwriter.
As evident from the graph,
Hurricane Wilma caused
occupancy gures to plunge
at the beginning of the peak
season in October 2005.
100
80
60
40
20
0
2003
Fig. 3 Hotel occupancies in Cancn, 20032007
Source: Cunningham Lindsey Mxico SA de CV, Mexico City
Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec.
2004 2005 2006 2007
Further information
Our brochure Claims manage-
ment following natural catas-
trophes Experience, analyses,
action plans provides further
information on this subject and
can be ordered or downloaded in
pdf format from our website at
www.munichre.com.
Percentage
Winter Storm Kyrill MSC Napoli
Author
Vera Maria Schneider, Munich
Windstorms with their elemental forces are one of
the great risks to ocean shipping. They cost insur-
ers millions of euros. Settling the liability issues is
often at least as complex as some of the arduous
rescue operations.
The mayday call from the MSC Napoli was
received at 10.30 a.m. on 18 January 2007. The
vessel had run into Winter Storm Kyrill. The coast-
guard responsible realised at once that it was
going to be a long and difcult job: the stricken
MSC Napoli was a 53,409-GRT container ship,
275 m long and 37 m wide, carrying 2,318 contain-
ers, some of them laden with dangerous goods.
The MSC Napoli had left the Port of Antwerp just
a few hours before on a route that would have
taken it past Portugal to its destination in South
Africa. As it was navigating the narrowest section
of the English Channel, the vessel ran into Winter
Storm Kyrill, one of the most intense winter
storms to hit Northern Europe in the year 2007.
The ship with hull insurance coverage amounting
to US$ 45m oundered. Water forced its way
into the engine room, so that the MSC Napoli was
unable to manoeuvre.
British and French coastguards launched a joint
rescue operation. Four helicopters, two tug boats,
and a rescue vessel tried to save the stricken ves-
sel. In the face of twelve-feet waves and winds
gusting over 110 km/h, the crew members were
rst taken on board the helicopters by winches and
then own ashore.
A French tug pulled the MSC Napoli in the direction
of Portland, which seemed to be the most suitable
port to deal with the vessel. But the tears in the side
got bigger, and the hull threatened to break apart.
The Maritime and Coastguard Agency (MCA) there-
fore decided to beach the ship near Sidmouth in
Lyme Bay off the coast of Devon, with a view to
lowering the probability of pollution from escaping
fuel oil and preventing the vessel from breaking
apart. Moreover, this shallow bay seemed to pro-
vide a good location for salvaging as many of the
containers as possible an assumption that later
turned out to be correct.
Accident in the English
Channel: the MSC Napoli
after Winter Storm Kyrill.
Vessel and cargo over
2,000 containers have to
be salvaged safely.
The unrelenting storm pushed the beached vessel
into a starboard list of as much as 35. More than
110 containers went overboard. Almost a hundred
of them were washed ashore. The pictures of scav-
engers went around the world. The police had to
cordon off the area in order to get the situation
under control.
Meanwhile, salvage crews continued to ght for
the vessel and its cargo. The 3,500 tonnes of oil in
the tanks of the MSC Napoli were pumped into a
tanker. At the same time, a start was made on
unloading the containers with the assistance of a
chartered barge equipped with heavy-duty cranes.
The containers saved from the MSC Napoli were
loaded onto a container shuttle vessel and trans-
ported to Portland Harbour. By pumping out the oil
and unloading the cargo, the salvage crews stabi-
lised the vessel at a list of about 10. A landing ves-
sel began collecting the containers that had been
washed ashore. An auxiliary harbour had to be t-
ted out with storage areas and container-cleaning
facilities.
General trend towards increasing costs
As vessel and cargo values increase, so too does
the risk when losses occur. While total losses are
tending to decrease, partial losses are becoming
more and more expensive. It is not only the vessels
and their cargo that can give rise to major loss
amounts but also the salvage operations. The sal-
vage of the W.D. Fairway, a dredger that collided
with the container vessel MSC Joanna off the
Chinese coast on 8 March 2007, is an example of a
complex salvage and rescue attempt with claims
exceeding the actual hull value. The value insured
was over US$ 150m.
Salvaging the Mighty Servant 3, a semi-submers-
ible, took several months and cost the insurers tens
of millions. The vessel had gone down off the coast
of Luanda, Angola, on 6 December 2006 and was
brought up from a depth of 52 m. For this purpose,
it was lled with compressed air and salvaged
using a crane.
Salvage costs are also likely to be high for the New
Flame, a bulk carrier that ran aground off Gibraltar
on 22 December 2006 after a collision. After several
attempts to reoat it had failed, the vessel was split
into two sections in a technically demanding cut-
ting operation. Because of adverse weather condi-
tions, one of the sections is still lying there waiting
to be salvaged.
The carrier Pasha Bulker was one of several vessels
that ran aground in stormy weather near the shore
at Newcastle, Australia, on 8 July 2007. After sev-
eral unsuccessful attempts, it was nally reoated
more than two months after the accident. It then
had to be towed to Asia before going into the dry
dock.
The costs involved in the majority of such salvage
operations quickly reach the two-digit million
mark.
Container vessels
Extreme stress
Container vessels are designed to achieve maximum prof-
itability. Under the pressure of economic considerations,
the loading capacity grows with every new vessel gener-
ation. Modern vessels can carry up to eight layers of con-
tainers stacked on deck, with a further ten layers disappear-
ing below deck. Vessels are already crossing the oceans
that are capable of carrying over 10,000 TEUs, and new
vessels with up to 15,000 TEUs are in the planning phase.
The exposed containers on deck form a high and broad,
almost unbroken metal expanse, which represents a gigan-
tic target for breaking water and stormy gusts. Even in
quiet fairways, container vessels and their cargo are
exposed to high acceleration and braking forces, and these
are intensied considerably in rough seas and strong
winds. This puts an enormous strain on the material of
both vessel and cargo.
Vessels are naturally designed to cope with the perils
of the sea as a rule. Nevertheless, many accidents occur
in which atmospheric conditions contribute to the cause
of loss. Often there is a combination of contributory factors:
windstorms, faulty or damaged materials, and human
errors all lead to a loss occurring in the end.
MSC Napoli Losses incurred
The salvage of the MSC Napoli is a prominent
example of the general trend towards higher sal-
vaging costs, because however favourable the out-
come of the operation at least as far as the cargo
was concerned the costs to be borne by the Inter-
national Group of P&I Clubs (the association of
protection & indemnity insurers) were still high.
They are far higher than what had previously been
considered normal.
One of the reasons for the cost explosion was that
salvaging the MSC Napoli was such a lengthy
undertaking. Firstly, it took a long time to decide
whether the vessel was to be considered a total
loss or a constructive total loss (CTL). The insurers
commissioned experts to carry out examinations
and concluded that it was really a case of CTL. And
whilst in the rst six months of 2007 it had been
assumed that the MSC Napoli could be towed
away, in the course of the salvage action it turned
out that the vessel could not be removed in one
piece. In the summer of 2007, explosives were
therefore used to break the vessel into two parts so
that it could be recycled.
In events like the MSC Napoli incident, the truth
regarding the cargo is also slow to emerge. To
what extent the cargo was damaged is not known
to this day in some instances. Evaluating the dam-
age to the goods takes time because every con-
tainer has to be opened and examined separately.
The recipients or senders of the goods are not
always found or do not even want to be found
because they could be liable for the costs of dis-
posal and/or salvage.
Spectacular salvage: A barge
off the coast of Devon prepares
to take on the cargo using
heavy-duty cranes.
The salvors succeed in stabilis-
ing the vessel at a list of 10.
Challenge for the future
The question now facing not only the MCA, which
is handling the Napoli case, but also the shipping
world in general is whether salvaging vessel and
cargo, as in the case of the MSC Napoli, would be
feasible if one of the large new container vessels
were involved. Could a challenge of this magnitude
be met with the equipment and personnel currently
available? According to the MCA, for example,
there are at present no cranes of the requisite size
that could be used in similarly adverse conditions.
And even if such cranes did exist, what would hap-
pen if the equipment, workers, and infrastructure
were a substantial distance from where the con-
tainer vessel was in distress? These are questions
that will remain a topical issue in the years to
come. The entire industry will have to work
together to nd suitable solutions.
The insurers
The example of the MSC Napoli serves not only to
highlight the complex technological aspects but
also the legal issues typically involved in losses of
these dimensions. The cause of an accident is of
particular importance. It is the basis for clarifying
most of the liability issues.
Hull insurers will try to establish whether an
insured maritime risk really was the cause of the
accident. The insurer carries the burden of proof
that other factors may have contributed. Liability
may be excluded if the vessel was not seaworthy
or if the policyholder was in breach of certain
obligations.
Cargo insurers see themselves being confronted
with large claims for the salvage of the contain-
ers. They will check whether they can take
recourse action against the carrier. In the event of
general average being declared, they will exam-
ine whether they can avoid paying contributions
to general average
1
. This depends on, among
other things, the underlying transport conditions.
For the P & I clubs/insurers, the question is
whether the owners/charterers liability towards
claims can be limited, e.g. in accordance with the
1976 London Convention (Convention on Limita-
tion of Liability for Maritime Claims). The applica-
bility of the corresponding legal bases for limita-
tion depends on the respective legal system. The
agreements that have been implemented or rati-
ed differ from country to country. Whether and
how limitation can be overcome also depends on
the applicable legal system. In addition, the car-
rier (owner/charterer) will examine the limitations
of liability that are applicable by law, e.g. whether
the Hague or Hague-Visby Rules
2
are to be applied
or not. If there is a legal limitation of liability, the
policyholder or the insurer is only liable up to this
(restricted) amount.
Technological and legal background
Salvage costs often make up a large portion of the
overall claims bill for hull insurers or, where wreck
removal is concerned, for P&I insurers. Most major
vessel accidents are nowadays handled by special-
ists using high-tech equipment. In many cases, the
details of salvaging a vessel cannot be xed until
the vessel has been unloaded and are determined
by, among other things, legal and ofcial require-
ments. The aim is usually to take the vessel to a
safe place or to secure it where it is. The services
most commonly performed by salvage companies
include towing and reoating.
If the rst salvage attempt is not successful, others
often follow. Sometimes, sunken vessels need to
be salvaged in order to minimise the risk to other
vessels or to take environmental considerations
into account. Sometimes, further salvage attempts
are undertaken in response to administrative
orders. If a stranded vessel cannot be oated in
order to tow it to a harbour or dock, it can be cut up
and disposed of in parts or even sunk if certain con-
ditions are complied with. Shipowners and ship-
ping companies try to prevent environmental dam-
age or at least minimise it. As its objective, the
salvage contract may equally specify salvage,
including partial salvage, of the cargo and removal
of the wreckage if the vessel is abandoned.
1
General average regulates, in principle, how exceptional
costs incurred in the course of rescue from a common peril
are allocated to a vessel and its cargo. These costs are
incurred either directly in the form of expenditure (e.g.
towage) or in the form of damage to the vessel and/or its
cargo deliberately caused or tolerated by the ships com-
mand during rescue operations (e.g. jettisoning on-deck
cargo).
2
International agreements that provide for uniform liability
regulations and govern the limits of the carriers liability
vis--vis the shipper.
Legal basis of salvage
Right of salvage was rst codied internationally
in the 1910 Salvage Convention (Convention
for the Unication of Certain Rules with Respect
to Assistance and Salvage at Sea) and later trans-
posed into national law. The remuneration of
salvors was originally based throughout the world
on the principle of payment for success. In ac-
cordance with this no cure, no pay principle,
payment was geared to the value of the property
saved. If all efforts were in vain, the salvor did
not receive a penny. This applied, for example,
to attempts to save the crew of a sinking vessel.
Major oil tanker accidents in the 1970s and 1980s
and the political will to give greater consideration
to environmental aspects in vessel salvage led
to innovations in international salvage law. It was
thought that salvors should be given greater in-
centive to combat pollution when dealing with
stricken vessels, particularly in situations which
otherwise offered them little scope for action
e.g. if there was little chance of saving the cargo
and payment was low or if salvaging a vessel
of relatively low value was a complicated oper-
ation.
The no cure, no pay principle was modied
for the rst time by the International Convention
on Salvage in 1989. Lloyds market and the indus-
try immediately accepted the new regulations
and incorporated them in Lloyds Standard Form
of Salvage Agreement (also known as Lloyds
Open Form or LOF for short). This is still the most
commonly used form of contract for salvages
today. Article 13 of the convention essentially
redened the principle of no cure, no pay by
specifying that the prevention of oil pollution is
a relevant factor for the calculation of salvage
money. One of the most important innovations
is to be found in Article 14, which states that,
given certain prerequisites, the salvor may claim
payment of special compensation in addition to
the salvage money if the standard reward is not
sufcient and the vessel or its cargo threaten to
damage the environment. However, the practical
application of Article 14 gave rise to numerous
questions, e.g. with regard to the calculation of
the extra compensation and the respective
amount.
In 1999, therefore, representatives of the insur-
ance industry and the International Salvage Union
agreed on the Special Compensation P&I Clause
(SCOPIC), which can be used as a supplement
to the LOF. It facilitates a practicable and stand-
ardised calculation of extra compensation for
salvors and xes rates for staff and equipment.
The choice between payment under Article 13
and remuneration under SCOPIC is not always
without its problems for salvors because they only
benet from SCOPIC if the costs are higher than
the salvage reward under Article 13. If the parties
cannot reach an agreement on the salvage costs,
the case is decided by a court of arbitration.
Whilst salvage costs under Article 13 are usually
covered by hull insurers, the SCOPIC costs are
assumed by the P&I Clubs. Deviations from
this arrangement are also possible, depending
on the original conditions. Denition or assign-
ment may then be a contentious issue. Salvage
costs have increased considerably over the
last few years. This is one of the reasons why the
rates under the SCOPIC compensation system
were increased by up to 25% with effect from
1 July 2007.
Salvage operations used to be carried out exclu-
sively on the basis of legal regulations, whilst now-
adays salvage companies usually conclude special
contracts for their services. The best-known and
most commonly used is Lloyds Standard Form of
Salvage Agreement. Particularly the portion of the
salvage costs based on SCOPIC is often high and,
at the same time, very difcult to predict.
The salvors of the MSC Napoli were apparently
engaged in accordance with the conditions of LOF
2000 with the inclusion of SCOPIC for extra com-
pensation. In principle, since the MSC Napoli is
deemed a CTL, the P&I Club or the International
Group of P&I Clubs will have to carry the costs of
removing the wreckage, which are in the two-digit
million range at least. The box on the left provides
a summary of developments in salvage law.
Conclusion
Against the backdrop of these numerous techno-
logical and legal issues, spectacular hull losses,
bigger and bigger vessels, and increasingly com-
plex markets, it is important that both insurance
and reinsurance agreements are based on clearly
dened and delineated covers.
As shown, loss amounts are continually rising, and
their assignment to the different lines of insurance
must be clear-cut. Transparency and communica-
tion in the face of the increasing complexity of the
factual position are therefore becoming more and
more important in terms of both underwriting and
claims. On the one hand, this facilitates adequate
pricing from the outset and, on the other, permits
a customer-friendly and efcient processing of
claims.

After the containers have been
salvaged, it becomes clear
that the MSC Napoli cannot be
removed in one piece.
The decision is made to break
the vessel into two parts using
explosives. In this way, the
individual parts can be towed
away and recycled.
Environmental risk
Environmental risk
Air pollution and liability
Of the environmental media air, soil, and water, it is the
air that inuences our physical well-being most intensively.
Whether in buildings or in the open air, we are all perman-
ently surrounded by it, and where it is excessively
enriched with pollutants, it puts our health in danger.
Author
Christian Lahnstein, Munich
Tokyo, Japan
The reduction of industrial
emissions brought an end to the
days of frequent smog alarms.
Environmental risk
There are many different sources of air pollution.
Some of them are caused by civilisation, like trafc
and industry emissions, forest res, slash-and-
burn forest clearance, animal husbandry, and the
use of fertilisers. Others, like volcanic eruptions or
the swirling up of ground dust in arid regions and
deserts, have natural causes.
Occupational safety and environmental protection
In connection with measures designed to keep the
air clean, a distinction can be made between occu-
pational safety and environmental protection
between indoor air and outdoor air with uid bor-
ders in each case. Whereas the venting of dusty
workplaces once put an additional strain on the
environment, these early occupational safety
measures have since developed into what we
know today as environmental protection. As far as
indoor air is concerned, open res for heating or
cooking in poorly ventilated rooms represent one
of the great health risks in developing countries to
this day. The situation is different in industrial
countries, where particulate matter is an unsolved
problem. This topic is therefore high on the agenda
for environmental authorities and European work-
ers compensation insurers alike.
Asbestos still an emerging risk
Asbestos is primarily a topic linked to occupational
safety. It is still an emerging risk for insurers for
three reasons:
With latency periods of ten to sixty years, the
number of new cases of illness caused by the
asbestos exposures of past decades is still on the
rise.
New cases are more readily identied nowadays
because of improvements in medical diagnos-
tics, and better access to information leads to
increasing claims from those affected.
The world consumption of asbestos, which had
been cut by half between 1980 and 2000, has
sadly been mounting again for some years. The
World Health Organization estimates that 125
million workers are today exposed to occupa-
tional asbestos risks, above all in the informal
sector of the construction industry with its largely
uncontrolled working conditions.
The consequences of the asbestos issue for third-
party liability insurers differ from country to coun-
try and are summarised in the article Asbestos
An overview (page 47).
Environmental liability
The focus here is on the liabilities of companies
with permanent emissions, which are usually not
insured. German landowners already began suing
industrial enterprises in the middle of the 19th cen-
tury at rst with success. But as industrialisation
progressed, their emissions came to be considered
typical of the area and therefore had to be
accepted.
Cross-border air pollution is another problem that
has been known for over 80 years. The Trail
Smelter dispute, which lasted from 1928 to 1941,
concerned damage to vegetation in Washington
State caused by sulphur dioxide gases from a
Canadian zinc and lead smelting facility called Trail
Smelter. The court of arbitration nally announced
that no country in the world had the right to cause
damage in another country including damage
caused by polluted air. Trail Smelter was therefore
ordered to invest in changes to its facility that
would prevent further damage in Washington.
Bangkok, Thailand
1,400 deaths from air pollution
every year.
Delhi, India
Tuk-tuks and buses already use
natural gas.
Hong Kong, Peoples Republic
of China
The city is affected by emissions
from neighbouring factories.
Japanese proceedings
Japan provides particularly interesting examples,
both historical and current, of environmental liabil-
ity involving air pollution (cf. the articles on pages
48 and 49). They demonstrate the meshing of liabil-
ity law and fund solutions as well as the increas-
ingly uid borders between legal corporate liability
and factual corporate liability, responsibility, and
accountability inuenced by reputation aspects.
The Yokkaichi asthma court case (see page 48),
involving petrochemical companies in the city of
Yokkaichi at the end of the 1960s, is only one of a
series of class actions that attracted international
attention and paved the way for stricter regulation
under environmental law in Japan during the
1950s and 1960s. This also led to a reduction in the
contribution of industrial emissions to air pollution.
As in most industrial countries, however, the con-
stant increase in private transport means that road
trafc is Japans main source of pollution from
emissions today despite improved technologies.
Against this backdrop, the recently ended court
case (see page 49) relating to compensation from
the state, car manufacturers, and hauliers for
asthma victims is particularly interesting.
Bad air
The World Health Organization distinguishes
between stationary, mobile, and area sources of
civilisation-induced air pollution: examples of the
three sources being individual industrial plants,
vehicles travelling along roads, and industrial
areas or cities where emissions cannot be assigned
to specic sources.

Environmental risk
Cairo, Egypt
Smog dome despite strict legal
requirements.
Kolkata, India
About 70% of the inhabitants
suffer from respiratory diseases.
London, Great Britain
A Low Emission Zone was
introduced in February 2008.
Asbestos An overview
Authors
Rita Mller, Marion Schwehr, both Munich
Within the last 100 years, about 200
million tonnes of asbestos bres
have been mined throughout the
world and processed in a wide var-
iety of industries. Whilst asbestos
consumption has fallen steeply in
Australia, the United States, and
western Europe, it is increasing in
Asia, particularly in China, India, and
Thailand. In 2005, these three coun-
tries together processed almost one
million tonnes of asbestos almost
half of global consumption.
The working conditions under which
asbestos is processed are often sub-
standard. In China, for example, the
Occupational Exposure Limits (OELS)
are still 2.0 bres/cm
3
of air. The OEL
in Thailand is no less than 5.0 bres/
cm
3
. For purposes of comparison,
the thresholds in western countries
have been reduced over the years to
0.1 bres/cm
3
. Besides that, safety
checks are also lacking, especially
in the many small rms and sub-
contractors operating in the largely
unregulated informal construction
sector.
Depending on the symptoms, the
health effects manifest themselves
after latency periods of between 10
and 60 years following the exposure
to asbestos. According to the Inter-
national Labor Organization, about
100,000 workers throughout the
world die every year from asbestos-
related diseases, including 30,000
from mesothelioma, an incurable
malignant tumour of the pleura,
60,000 of lung cancer, and 10,000 of
asbestosis. And the numbers of vic-
tims are increasing. They are likely to
continue rising in Australia until 2010
and in western Europe until 2015 or
even 2020. In the former Soviet Union
and in the countries of Asia that still
use asbestos on a large and even
increasing scale, a drop in the num-
bers of victims is not to be expected
either. Only in the United States do
the numbers seem to have passed
their peak since 2000.
Costs of asbestos-related injuries
Expenditure for asbestos-related
occupational diseases is considerable
all over the world. Between 1990 and
2005, Germanys workers compen-
sation insurance spent more than
3bn on compensation for asbestos-
related diseases, with long-term total
expenditure expected to surpass the
10bn mark. Expenditure of 350m in
2005 represented a third of all claims
payments for occupational diseases
that year.
Environmental risk
In France, the 585m spent on the
compensation of asbestos-related
diseases in 2003 corresponded to
almost half of the years total expend-
iture for occupational diseases. The
US Rand Institute estimates that
between the early 1960s and 2002, a
sum of roughly US$ 70bn was paid in
the United States for civil law liabil-
ities in connection with asbestos-
related personal injuries. The long-
term liability total is estimated at
US$ 200bn, with insurers carrying a
share of US$ 120bn. In the UK, esti-
mates of the total costs for asbestos-
related personal injuries under social
and liability law range between
15bn and 39bn. Third-party liability
insurers have paid out about 1.3bn
in asbestos claims to date.
Los Angeles, United States
Once emissions are reduced,
the smog over the city lifts.
Manila, Filipino
Leaded petrol will soon
be banned here, too.
Mexico City, Mexico
The city instituted a car-free
day once a week.
Environmental risk
Different compensation systems
In most cases, the diseases caused by
asbestos dust are due to exposure at
the workplace. There are also strains
on the environment, however, to
which everybody can be exposed,
especially in densely populated
industrial countries like Japan and
the Netherlands, production coun-
tries like Australia, or developing
countries with industrial emissions
that are generally less subject to con-
trols.
Occupational diseases are compen-
sated for in different ways. This is due
to social insurance systems with indi-
vidual structures that have evolved in
the course of history and their spe-
cic mode of interaction with liability
law. In Germany, it is workers com-
pensation insurance that compen-
sates asbestos-exposed workers.
Employers enjoy a liability privil-
ege, which means they cannot be
sued by their employees under civil
law.
In France, a fund was set up in 2002 to
compensate all asbestos victims
regardless of their exposure at the
workplace. At present, the volume of
recoveries from the liable employers
and manufacturers is not yet foresee-
able. In the UK, where employers
have no liability privilege, it is the
obligatory employers liability insur-
ance which carries the main burden
of compensation. Besides this, there
is a workers compensation insurance
nanced out of taxation, as well as a
special fund which guarantees a
basic pension, quite apart from the
National Health Service, which is also
nanced by taxes.
As a rule, therefore, it is the employ-
ers and the insurance systems behind
them that are the target of claims for
damages from workers exposed to
asbestos. In the United States, how-
ever, it is the asbestos manufacturers
and hence the product liability
insurers that carry the main burden
of compensation, with workers com-
pensation insurance playing only a
minor role.
Yokkaichi asthma
Author
Sanae Muraoka, Munich
In the late 1960s and early 1970s,
there were a number of environmen-
tal liability lawsuits that had a great
inuence on Japans environmental
policy. Whilst the Minamata and Itai-
itai cases involved water polluted by
mercury and cadmium, the Yokkaichi
asthma case involved severe air pol-
lution.
After the Second World War, the navy
sold some of its fuel depots to the
growing petrochemical industry in
Yokkaichi. The smoke and dust to
which the inhabitants were exposed
led to many cases of chronic asthma
and bronchitis in the late 1950s. In the
district of Shiohama, which lies
downwind from the industrial plants,
80% of the 16,000 inhabitants suf-
fered from serious illnesses of the
respiratory tract in the early 1960s.
This was due to the use of low-priced
fuel oil from the United States and
the Middle East. It contained consid-
erably more sulphur than that from
Sumatra or Russia, which would have
reduced sulphur oxide emissions by
90%. But after the Second World War,
cooperation with US business had
priority.
Beijing, Peoples Republic of
China
The IOC wants to reschedule
Olympic competitions in the
event of smog.
Moscow, Russia
The countrys industrial
centre.
New York, USA
Politicians have long been
endeavouring to improve
the air quality.
Environmental risk
In 1970, the concentration of sulphur
dioxide in the air in Yokkaichi reached
between 1 ppm and 2.5 ppm ten to
twenty-ve times the legal limit of
0.1 ppm. Evidence of the connection
between sulphur dioxide exposure
and asthma diseases was rst pro-
vided in 1963 by Professor Katsumi
Yoshida of Mie University.
Two years later, the city of Yokkaichi
started paying the medical costs for
the people affected. At rst, 18 people
were recognised as Yokkaichi asthma
patients, 14 of whom had already
been given a terminal diagnosis. In
the years that followed, the number
of patients diagnosed mounted: to
381 in 1967, and to 600 in 1969. The
medical costs were a growing burden
on municipal nances. As of 1970, the
Japanese government assumed a
share of the costs, at rst for 464
patients.
On 1 September 1967, nine patients
started legal proceedings against six
of the large corporations responsible
for pollutant emissions. The defend-
ants were
Ishihara (agrochemicals),
Chubu Electric Power Company
(thermal power plant),
Showa Yokkaichi (oil renery),
Mitsubishi Yokkaichi (oil renery),
Mitsubishi Chemical Yokkaichi,
Monsanto Chemical Yokkaichi.
When the verdict was announced in
1972, the court recognised the com-
panies responsibility under civil law
and awarded the claimants the com-
pensation they had demanded. The
total amount of compensation came
to 88m (about 540,000). The indi-
vidual plaintiffs received amounts of
between 3.7m and 17m. The state
and the city also paid damages for
inadequate prevention.
In 1973, a pension entitlement for
environmental victims was nally
pushed through in parliament. The
payments are guaranteed by a fund
nanced primarily by the relevant
companies. Those in severely
impacted areas are required to make
higher contributions. 20% of the fund
is covered by motor vehicle tax.
The Yokkaichi asthma case and the
other environmental suits of the
1960s and 1970s made an important
contribution to todays stricter regula-
tion under Japanese environmental
law. But companies are now relocat-
ing environmentally hazardous fac-
tory plants to other Asian countries in
which the restrictions are consider-
ably less stringent.
Diesel exhaust in Tokyo:
Compensation for
asthmatics
Author
Sanae Muraoka, Munich
Half of the worlds population live in
conurbations and rising. The larg-
est conurbation in the world is
Tokyo-Yokohama, with over 34 mil-
lion inhabitants.
In 1996, automobile manufacturers
were taken to court by Tokyo inhabit-
ants who were suffering from asthma
as a result of diesel exhaust pollution.
The suit ended in 2007 with more
than 500 asthmatics accepting the
conciliation proposal made by the
citys supreme civil court. The auto-
mobile manufacturers were to pay
the plaintiffs 7.2m. In addition, the
companies are paying almost 20m
into a fund to cover the medical costs.
The Japanese government and the
city of Tokyo were also sued.
Together, they are paying a further
72m into the fund, and the Metro-
politan Expressway Co. is contribut-
ing 3m. Moreover, the conciliation
proposal requires the City of Tokyo to
do more to prevent trafc jams and
monitor the air quality.
Qingdao, Peoples Republic
of China
Economic growth versus air
pollution.
So Paulo, Brazil
About 25% of all Brazilian cars are
driven here.
Shanghai, Peoples Republic
of China
One of the worlds most polluted cities.
A wafer: only under clean-room
conditions is it possible to pro-
duce hundreds of microproces-
sors on this silicon wafer.
Special risk
Clean air in semiconductor production
Semiconductor manufacturers react very sensitively to the
subject of air because in the clean rooms where computer
chips are produced the air must be so clean that it does not
contain a single particle of dust. But what if a re breaks out?
Authors
Peter Clemenz, Dr. Robert Schmid, both Munich
Special risk
The rapid development of the semiconductor
industry continues, with the performance of micro-
processors currently doubling about every 18 to 24
months. The design of semiconductors, which are
extremely powerful electronic circuits, is in the
nanometre range nowadays, with strip conductors
only 45 nm wide. Initial efforts to reduce them to
32 nm are already in progress.
With the latest generation of microprocessors
being out of date after only 912 months, the mar-
ket also changes at an extremely fast pace. The
successful manufacturers are the ones that man-
age to be faster than their competitors. To do so,
they need ultramodern factories in which increas-
ingly powerful chips can be produced in trouble-
free operations. But it only takes a single particle of
dust to land on the surface of a wafer and the
effect, when magnied under a scanning electron
microscope, is as if the wafer has been struck by a
meteorite. The computer chip is useless because in
this condition it would process the data incorrectly.
Semiconductor manufacturers therefore have a
major interest in preventing air pollution in the
environs of their production plants, which is only
possible by way of clean-room conditions. The
most stringent standard of cleanliness is a max-
imum of ten particles sized 0.1 m per cubic metre
of air (ISO Class 1 based on DIN EN ISO 14644).
For purposes of comparison: one cubic metre of
normal ambient air seldom contains fewer than
40 million particles larger than 0.3 m.
Dust-free zones for trouble-free operations
Only if this level of cleanliness is achieved can the
production process be trouble-free. Unauthorised
access from outside or simply opening the wrong
door (there are no windows) can easily stop pro-
duction for several days, with nancial losses cost-
ing tens of millions.
The air is cleaned and kept clean by churning it in a
predetermined pattern without the admission of
outside air, using multistage lters, and encapsu-
lating particularly sensitive sections of production.
The elaborate ltering technique is supplemented
by another process that prevents the cleaned air
from being contaminated again. Clean-room con-
ditions can be maintained permanently by ensur-
ing that the operating resources have a very high
level of cleanliness and keeping the air in the room
at a slightly higher pressure than the ambient air.
Additionally, protective clothing prevents employ-
ees from carrying dust into the production area.
Clean room Nothing could be cleaner
Stringent air cleanliness standards like ISO Class 1
based on DIN EN ISO 14644 in rooms with oor
areas of many thousand square metres are typical
of the semiconductor industry. This kind of fac-
tory construction is known as ballroom design.
In the pharmaceutical industry, too, the produc-
tion and placement of active substances on
the base materials involve strict requirements
with regard to air cleanliness even if the areas
concerned are not as big.
Biotechnology also needs clean rooms, e.g. for
the production of insulin using bacteria. High
standards must be met in such production areas
in order to prevent airborne foreign micro-organ-
isms from changing or lowering production.
Regardless of where clean rooms are used
whether in medical technology, chemical produc-
tion, the optical industry, microsystem technology,
or in food production and packing contamin-
ation by smoke and soot can interrupt production
for a long time and cause high losses.
Special risk
a similar order of magnitude, too. It may take
months for the equipment to be repaired, cleaned,
and recommissioned. Technological development
is progressing at such a fast rate nowadays that
recommissioning after such an interruption is
sometimes uneconomical. This may also apply to
production units that are not directly affected.
The major loss events in the period 19962005
(Table 1 on page 53) illustrate how strongly the
semiconductor industry is exposed to losses. High
concentrations of values and the special produc-
tion conditions in this sector give rise to probable
maximum loss scenarios of 12bn.
Access to more detailed information on losses and
statistics is limited. This is partly due to the fact that
losses are treated like production secrets. What is
more, neither insurers nor reinsurers play a domin-
ating role in the market.
Insurance aspects
In the semiconductor industry, as in the case of all
large industrial facilities, effective risk manage-
ment starts at the planning stage. Risk managers of
all the companies concerned should be involved in
the erection of such facilities and take into account
the insurance aspects relating both to the erection,
property, and BI covers during the operating phase
and to plans for the future. Natural catastrophes
like earthquakes and ood are not to be overlooked
in the process either.
Particles smaller than 10 m
and larger than 1 m fall
into the category of sus-
pended dust. Clean rooms
have lters which even pre-
vent the passage of viruses;
in terms of their size, com-
paring viruses and bacteria
is the same as comparing
toy cars and full-size tanks.
Special risk
Fig. 1 Small particles in a size comparison
Main hazards for production
A nightmare for every manufacturer: the produc-
tion process is interrupted by power outage or re.
The impact of power outages can be cushioned by
an efcient emergency power supply. This will
ensure a minimum degree of air movement, which
will sufce to keep impurities away from machines
and equipment. Minor losses, like the interruption
of certain processes, may nevertheless occur.
Wafers, for example, are heated up in the thermal
diffusion furnace so that the foreign atoms spread
out in a predetermined pattern. The heating time
and temperature must be observed precisely. If the
power is down even for only a short time, the con-
trolled temperature is no longer assured, which
results in the substrates (wafers in progress)
becoming unusable.
Clean-room res may cause large and even major
losses. Short circuits, welding work, spontaneous
combustion of deposits in exhaust-air ducts, and
leakage of highly or spontaneously ammable
liquids and gases are typical causes of re.
The higher temperatures damage equipment and
operating resources and can cause losses amount-
ing to several millions of euros within the space of
a few minutes; and that is just the beginning. Ther-
mal activity and the air stream from the air condi-
tioning can make the smoke spread and contami-
nate delicate and expensive equipment even a long
distance away. In the worst case, the equipment is
so badly damaged that it has to be replaced. A
small re can therefore lead to material damage in
the three-digit million euro range. The nancial
loss caused by business interruption soon reaches
Scale 1:1,000 Diagram: Munich Re
Smoke particle
1 m
Dust particle
5 m
Hair
60 m
Table 1 Large losses in the semiconductor industry, 19962005
Loss year Cause of loss Town/city Property/
BI losses (US$ m)
1996 Conagration Hsin Chu, Taiwan 180
1997 Conagration Hsin Chu, Taiwan 350
1999 Earthquake Various locations in Taiwan 300*
2000 Conagration Albuquerque, USA 200**
2000 Leakage and Orlando, USA 40
contamination
2000 Leakage and Temecula, USA 45
contamination
2003 Conagration Caen, France > 100
2005 Conagration Chung Li, Taiwan approx. 240

Source: Munich Re
Unambiguous wordings are essential in order to
minimise differences of opinion in the process
of claims settlement. Loss prevention measures,
particularly with regard to re protection, must
be implemented.
Semiconductor manufacturers, the insurance
industry, and re protection organisations have
devised joint protection concepts like the National
Fire Protection Associations Standard 318
(Standard for the Protection of Semiconductor
Fabrication Facilities). The central items of these
concepts are
area-wide smoke detection using highly sensitive
apparatus in the air stream,
rapid-action sprinkler systems on all levels with
combustible materials and ignition sources, and
far-reaching organisational measures like setting
up emergency response teams and training staff
thoroughly to cope with all conceivable acci-
dents.
Other important questions are: Is there an on-site
re service? How are the local re brigades
equipped? And are the re brigades properly
prepared to deal with the risk?
The special risk of semiconductor manufacture
high concentrations of values combined with high
susceptibility to losses requires an insurance
programme that is tailored to individual customers
and their individual risk. A challenge for every
insurer.
Clean air: In the production
areas of semiconductor
production, the air streams
through lter systems in the
ceiling and oor. It is also
exchanged several times a
minute.
Special risk
* Estimate.
** Not including contingent
business interruption losses.
+++ 1820 January, Europe: Winter Storm Kyrill +++ 2530 June, northeast England,
and 2023 July, southwest England and Wales: Floods +++ 17 July, Netherlands: Fire in
a production facility for refrigeration technology +++ 17 July, Brazil: Plane crash +++
1 August, United States: Bridge collapse +++ 15 August, Peru: Earthquake.
1820 January, Europe
Winter Storm Kyrill
+++ The storm crosses central Europe at
wind speeds exceeding 100 km/h on a
widespread scale and 200 km/h in exposed
mountain areas. Germany and the UK are
the main countries affected. The insured
loss: 4.5bn.
2530 June, northeast England,
and 2023 July, southwest England
and Wales
Floods
+++ Heavy, prolonged rain leads to oods.
The areas hit worst in June are in York-
shire and Lincolnshire, and in July large
parts of Gloucestershire, Oxfordshire,
and Worcestershire are under water.
The Association of British Insurers esti-
mates insured losses of 2.2bn for each
of these events.
17 July, Netherlands
Fire in a production facility for refrigeration
technology
+++ During roof repairs, the production
facility at KOMA Koeltechnische Industrie
B. V. catches re. Despite a massive re-
ghting operation, with re brigades even
coming from Germany, the facility burns
down completely. The loss is probably
25.7m.
17 July, Brazil
Plane crash
+++ On its approach to Conhongas Airport
in So Paolo, a TAM Airbus A-320 slithers
over the wet runway, crashes through the
fencing, and explodes in a fuel station. 199
people are killed. On the basis of provisional
reserve gures, the insured loss is US$ 370m.
1 August, United States
Bridge collapse
+++ In Minneapolis, a freeway bridge
over the Mississippi collapses over a length
of 140 m during the evening rush hour.
This launches a debate on US infrastructure:
Is it decaying, dilapidated, decient?
15 August, Peru
Earthquake
+++ An 8.0 earthquake that strikes in the
evening destroys tens of thousands of
homes in the Ica region. Nearly 600 people
are killed.
1723 August, Caribbean, Mexico
Hurricane Dean
+++ Dean is the third-strongest Atlantic
hurricane ever to make landfall. It causes
insured losses of about US$ 450m in
Central America and the Caribbean.
5 September, Kazakhstan
Satellite crash
+++ A Russian Proton-M/Breeze-M rocket
with the Japanese communications
satellite JCSat 11 on board crashes in
the vicinity of Dzhezkazgan. Cause: prob-
lems encountered when separating the
1st and 2nd stages. The satellite was
insured for around US$ 180m.
21 October, California, United States
Wildland res
+++ Severe wildland res that rage for
more than a week burn over 200,000
hectares of land and destroy over 2,000
homes. According to estimates by insur-
ance experts, the property loss caused
by these res could exceed 1.1bn.
15 November, France
Severe Airbus accident
+++ During a routine test of the turbines,
an Airbus 340-600 which is almost ready
for delivery to Etihad Airways, breaks away
from its anchoring and crashes into a
soundproong wall. Fortunately, nobody
suffers more than minor injuries. The
hull loss amounts to some US$ 200m.
24 November, Germany
Conagration at a car components supplier
+++ A conagration destroys one of four
production buildings at Hella KGaA
Hueck & Co, a car components supplier,
whose production mainly focuses on
equipment for spare parts supplies but also
includes some small series products for
standard equipment. It is the largest re loss
in Germany in 2007 and will cost insurers
more than 60m.
7 December 2007, west coast of South Korea
Vessel collision
+++ Collision between a oating crane
and the crude oil tanker Hebei Spirit,
which is lying at anchor. More than 10,000
tonnes of oil escape into the Yellow Sea
and pollute the coast.
+++ 1723 August, Caribbean, Mexico: Hurricane Dean +++ 5 September, Kazakhstan:
Satellite crash +++ 21 October, California, United States: Wildland res +++ 15 November,
France: Severe Airbus accident +++ 24 November, Germany: Conagration at car com-
ponents supplier +++ 7 December 2007, west coast of South Korea: vessel collision.
Peter Clemenz
Claims engineer
Germany, Asia Pacic
and Africa
Thomas Endriss
Underwriter
Aviation Facultative
Special and
Financial Risks
Richard Gross
President
Cunningham Lindsey
Mxico SA de CV,
Mexiko City
Winrich Krupp
Claims engineer
Europe and
Latin America
Dr. Alfons Maier
Senior claims engineer
Germany, Asia Pacic
and Africa
Rita Mller
Underwriter
Europe and Latin America
Sanae Muraoka
M. A. in political science
Germany, Asia Pacic
and Africa
Christian Lahnstein
Head of Section
Risk, Liability & Insurance,
Corporate Underwriting
Josef Probst
Senior claims engineer
Europe and Latin America
Ernst Rauch
Head of department
Geo Risks Research/
Corporate Climate Centre
Dr. Robert Schmid
Underwriter
Special and Financial Risks
Vera Maria Schneider
Claims lawyer
Global Clients/North
America
Marion Schwehr
Consultant
Risk, Liability & Insurance
Corporate Underwriting
Markus von Stumberg
Underwriter
Europe and Latin
America
Authors in this issue
Issue 2/2007
As a Schadenspiegel recipient, I would like to thank
you again for this outstanding publication (up to
the minute, top class, excellent quality printing)
and the enthusiasm of all those involved. Please
send additional copies in future to the heads of our
branches Group and Industry.
Yours faithfully,
Ulrich Schneider
HDI-Gerling Industrie Versicherung AG,
Germany
Schadenspiegel team: We are glad to comply with
this request. By the way, Schadenspiegel can be
downloaded in pdf format from Munich Res publi-
cation portal at www.munichre.com.
Issue 1/2007: Special feature issue:
Risk factor of earth
I have been an avid reader of Schadenspiegel for
many years and nd it extremely informative and
useful. Reading through the 1/2007 issue, I noticed
that under the major losses and natural catas-
trophes in 2006 (pages 52 and 53) you mention
Cyclone Larry (20 March) in the west coast region
of Australia. In fact, Cyclone Larry hit the east coast
of Australia (Queensland has sea on the east and
north only).
Irfan Choudhry
Underwriting Manager
Calliden Group Ltd, Australia
Schadenspiegel team: Unfortunately, we really
did make a mistake here. Cyclone Larry left its
marks on the northeast coast of Australia. We are
very grateful for this observant comment!
Issue 2/2006: Special feature issue:
Risk factor of re
Some time ago, I received the Risk factor of re
issue of Schadenspiegel and found it very interest-
ing. In particular, the article Special topic: Fire
protection and loss prevention contains very
good information regarding sprinkler systems and
protection for property and human life.
Do you know if the underwriters, engineers and
claims experts at Munich Re have any additional
information like this? Specically, do they have any
additional information regarding the loss expect-
ancy of sprinklered versus unsprinklered facilities
or any additional information on the cost of install-
ing sprinkler systems?
Yours sincerely,
Brian W. Beeghly
Director of Risk Management
Nike, Inc., USA
Schadenspiegel team: Munich Res experts fol-
lowed up this enquiry, of course, and were able to
supply Nike with the requested information.
Readers letters
We can take criticism and praise! What
do you like about Schadenspiegel, what can
we do to improve it? Here is a selection of
responses to past issues.
What do you think about this current issue?
Write to: schadenspiegel@munichre.com
Dear Reader,
Air on the move is expensive for the insurance industry.
Windstorms can devastate whole regions and cause damage
costing billions. We have gathered together all you need to know
about this natural hazard in a special topic entitled Weather
phenomenon: Windstorm. We give you a picture of the loss
situation after Hurricane Wilma, which devastated the Mexican
holiday paradise of Yucatn in 2004 and led to business interrup-
tion losses whose adjustment was particularly tricky. And then
we show how arduous the salvage of a container vessel can be,
taking the example of MSC Napoli, which was stricken during
Winter Storm Kyrill in 2007.
The risk factor of air is not restricted to the windstorm hazard,
though. Cue: air pollution. Of the environmental media air, soil,
and water, it is the air that inuences our physical well-being
most intensively. What about the expenditure for asbestos-
related occupational diseases or immission-related respiratory
diseases? And is air a friend to aviation or rather an incalculable
risk? We interview a pilot and aviation underwriter and nd out
how dangerous turbulent air movements really are to air trafc.
Air can also catch re. In this, the fourth and last special feature
issue in our series Water, re, earth, air, our authors report
on the explosion hazard of combustible dust. They also address
the necessity of clean air in the production of semiconductors
and describe a defective wind turbine, whose rotor continued
turning at increasing speed until one of the rotor blades broke
off. Finally, this issue also contains our review of catastrophes
in 2007.
What do you think of this issue? Please write and tell us at:
schadenspiegel@munichre.com
Your Schadenspiegel team
Our publication portal at www.munichre.com is the place to go if you
wish to order past issues of Schadenspiegel since 2000 or download them
in pdf format.
Risk factor of air
Stormy, destructive,
dangerous
Editorial
2008
Kniginstrasse 107
80802 Mnchen
Germany
Supervisory Board
Dr. Hans-Jrgen Schinzler (Chairman),
Herbert Bach (Deputy Chairman),
Hans-Georg Appel, Holger Emmert,
Ulrich Hartmann, Dr. Rainer Janen,
Prof. Dr. Henning Kagermann,
Prof. Dr. Hubert Markl, Wolfgang Mayrhuber,
Kerstin Michl, Prof. Karel Van Miert,
Ingrid Mller, Prof. Dr. Heinrich v. Pierer,
Dr. Bernd Pischetsrieder, Dr. Jrgen
Schimetschek, Dr. Albrecht Schmidt,
Dr. Ron Sommer, Wolfgang Stgbauer,
Josef Sl, Judy V
Tel.: +49 (89) 38 91-0
Fax: +49 (89) 39 90 56
http://www.munichre.com
Responsible for content
Claims Management & Consulting:
Nicholas Roenneberg
Geo Risks Research/Corporate
Climate Centre
Prof. Dr. Peter Hppe
Marine: Thomas Artmann
Risk, Liability & Insurance:
Christian Lahnstein
Claims: Dr. Paolo Bussolera,
Arno Studener, Dr. Eberhard Witthoff
Space: Philip Ruari McDougall
Editors responsible
Daniela Przer
Tel.: +49 (89) 38 91-93 84
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Jutta Pschel
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Fax: +49 (89) 38 91-7 57 58
Editorial assistant
Michael Domke
ISSN 0941-0805
Picture credits
Cover: picture-alliance/dpa
pp. 2, 3: MR archives
p. 6: AP/Huntington Herald-Press/Andrew
Hancock
p. 10: U.S. Chemical Safety & Hazard
Investigation Board, Washington D.C.
p. 13: AP Photo/Stephen Morton
p. 14: Getty Images/John Fiordalisi
p. 18: Getty Images/Jim Reed
p. 22: MR archives (Possler)
p. 24: Getty Images/David McNeese
p. 30 from left to right: AP Photo/Staff/
Koundakjian, MR archives, AP Photo, picture-
alliance/dpa, Getty Images/Junko Kimura,
MR archives, MR archives (Rauch), MR
archives (Kron), Reuters/Carlos Barria
p. 31: from left to right: picture-alliance/dpa,
picture-alliance/dpa, Jrgen A. Schwarz,
Munich, Loser/mediacolors, Sascha Schuer-
mann/ddp, Tannen Maury/AFP/Getty Images
p. 33: 2005 NOAA /Getty Images
pp. 35, 36: Marte Rebollar/AFP/Getty Images
pp. 38, 40, 43: Maritime and Coastguard
Agency, Southampton, Hampshire
p. 44: Andanson James/Corbis Sygma
p. 45 from left to right: Robert Nickelsberg//
Time Life Pictures/Getty Images, Modrow/laif,
AP Photo/Anat Givon
p. 46 from left to right: Heeb/laif, Getty
Images/Tim Graham, Barry Lewis/Alamy
p. 47 from left to right: Gabriel Bouys/AFP/
Getty Images, Getty Images/Paula Bronstein,
picture-alliance/dpa
p. 48 from left to right: Chris Niedenthal/Time
Life Pictures/Getty Images, Peter Scholey/
Alamy, picture-alliance/dpa
p. 49 from left to right: picture-alliance/Uwe
S. Meschede, Yann Arthus-Bertrand/Corbis,
Mark Ralston/AFP/Getty Images
pp. 50, 53: Intel Corporation, Santa Clara, CA
picture-alliance/dpa, picture-alliance/dpa, AP
Photo/Marcelo Min, Mandel Ngan/AFP/Getty
Images, picture-alliance/dpa
Reuters/Reuters TV, picture-alliance/dpa,
picture-alliance/maxppp, Lothar Zimmer-
mann, Hamm, picture-alliance/dpa
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Additional copies are available at a
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Schadenspiegel
Special feature issue
Risk factor of air
2008
Kniginstrasse 107
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Germany
Order number 302-05655
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