AIR Worldwide Collaborates with experts at the Brookings Institution and AXIS Capital to Quantify the Impact from Climate Change on Hurricane Risk
BOSTON, Jan. 19, 2021 (GLOBE NEWSWIRE) -- Catastrophe modeling firm AIR Worldwide (AIR), in collaboration with experts from the Brookings Institution and AXIS Capital Holdings Limited, released a report which explores how climate change may affect hurricane risk in the United States by 2050, specifically related to financial losses to residential and commercial properties. AIR Worldwide is a Verisk (Nasdaq:VRSK) business.
“Climate-related risks are among the most serious issues facing the world today and insurers have a critical role to play in mitigating them. Investing in ongoing research like today’s, in partnership with AIR and Brookings scholars, is essential,” said Albert Benchimol, President & CEO at AXIS. “While climate change is likely to affect hurricanes in multiple ways, the report highlights two important aspects: an increase in the frequency of the strongest storms, and additional storm surge flooding due to sea level rise.”
The analysis relies on the AIR Hurricane Model for the United States, which considers wind, storm surge, and precipitation-induced flooding, and AIR’s database of property exposure. The model features a catalog of simulated hurricane seasons, containing multiple events of different strength making landfall along the Gulf and Atlantic coastlines. The baseline catalog is developed to reflect today’s climate and AIR created a new set of catalogs that reflect both the frequency and severity changes resulting from the future climate.
The report explores future hurricane-generated storm surge losses for selected study areas around New York, Houston, and Miami, as indicators of the additional risk created by rising sea levels. The results of the analysis show that increased event frequency and sea level rise will have a meaningful impact on future damage. The growth in the number of stronger storms, and landfalling storms overall, increases modeled losses by approximately 20%, with slightly larger changes in areas such as the Gulf and Southeast coasts where major landfalls are already more likely today. The loss increases extend to inland areas as well, as stronger storms may penetrate farther from the coast. The impacts from sea level rise, using the analysis of storm surge for New York, Miami, and Houston suggests that by 2050, sea level rise may increase storm surge losses by anywhere from one-third to a factor of almost two, with larger impacts possible when combined with increases in the number of major storms. The actual losses in 2050 could be higher; while the analysis holds property exposure constant at today’s levels, coastal exposure is currently growing at a 4% annual rate and are likely to continue growing.