“Climate change is real and we need to factor it into all future catastrophe modelling” – that’s the conclusion of a new report published today by Lloyd’s. The report: ‘Catastrophe Modelling and Climate Change’, states that “with the existence of climate change, and the effect it is having globally, the time has come for the insurance industry and catastrophe modelling firms to recognize factors such as surface sea level and air temperature rises throughout their models.”
Lloyd’s report concludes that “changes in climate have the potential to affect extreme weather events, which subsequently impact on insurance being underwritten in the Lloyd’s market; the 20 centimeter [7.87 inches] sea level rise caused by Superstorm Sandy in 2012 increased losses by 30 percent in New York alone.”
The report also finds that the frequency of extreme weather events in most regions of the world, including Europe, North America, Asia and Australasia, has increased.
John Nelson, Chairman of Lloyd’s, said: “Climate change is a reality and the vast majority of scientific research concludes that it is being driven by human activity. Whilst some debate still remains as to the extent of climate change, the evidence points to it leading to more extreme weather events.
“Catastrophe models are what the insurance and other industries use to quantify our understanding of the natural world and predict the impact of the weather. We need to be able to model and understand these events better, and help mitigate the impact climate change is having on communities and businesses.”
Source: Lloyd’s of London