Disaster toll ‘shows need to tackle climate risk’
The severity and scale of natural catastrophes this year underlines the need to confront a new era of climate extremes, Willis says.
The broker’s latest natural catastrophe review says it has been six years since the global insurance industry last experienced low annual losses, and the total is on track to top $US100 billion ($154 billion) again this year.
Catastrophes in the first half included the Los Angeles wildfires and severe convective storms in the US, Storm Eowyn in Europe, wildfires in Japan and South Korea, the Myanmar earthquake and Cyclone Alfred in Australia.
Willis, a WTW business, says Alfred was the first tropical cyclone to affect Brisbane since Zoe in 1974 and brought strong winds, coastal surge and torrential rain to a region unaccustomed to such storms.
“As climate change drives cyclones further south and increases rainfall intensity, regions like southeast Queensland and NSW must reassess building codes and preparedness strategies,” Asia-Pacific climate risk centre head Christopher Au said.
“Meanwhile, unprecedented wildfires in Japan and South Korea underscore how climate change is reshaping fire risk across Asia-Pacific, including bushfire in Australia.”
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Dr Au says longer, hotter fire seasons and expanding property development in forested areas are creating new exposure zones.
“As global efforts struggle to keep temperatures below 2 degrees above pre-industrial levels, our focus must now turn to adapting and building resilience against a broader spectrum of climate-driven threats,” he said.
“Companies can respond with tailored risk mitigation and adaptation strategies, with insurance solutions such as parametric products helping address this changing risk profile.”
Director of natural catastrophe and physical climate for North America Pietro Andreotti says the Los Angeles wildfires show how rapidly evolving climate and urban dynamics are outpacing traditional disaster models.
“Risk managers can quantify this shifting risk by challenging model assumptions, developing detailed vulnerability analyses and tailoring insights to the wildland-urban interface, where the stakes are highest,” he said.
Willis says the Japan and South Korea wildfires were the worst in at least a generation, and Storm Eowyn generated record wind speed over Ireland.
From the latest Insurance News magazine: Find out just how close the east coast came to disaster when Cyclone Alfred swept ashore