Hurricanes and Climate Change

Caroline McDonald


August 3, 2015

hurricanes climate change

While the earth’s climate is changing, this has so far had no measurable effect on the North Atlantic hurricanes that drive catastrophe market losses.

Additionally, the loss potential of the cat market from hurricanes is “pretty much the same this year as it was last year and five years ago, the same as it will be next year and five years from now after adjusting for increases in insured property values,” according to Climate Change and Hurricane Loss: Perspectives for Investors by Karen Clark & Company. The report notes that the key reason for increases in loss levels over time is a rise in the value of properties damaged by hurricanes.

A three-part approach was used in determining the potential impact: compiling more than 100 years of historical hurricane data to gain perspective on the frequency and severity of insurance losses, examining the challenges of predicting hurricanes in the short term, and looking at the long-term outlook.