Yesterday, Swiss Re hosted a lunch in New York previewing the city's Climate Week, which takes place in late September and involves business and government interests discussing how to address climate change issues. The reinsurer has the topic on its radar due to the potential link to catastrophe events, such as wildfire, flooding, and hurricanes.
With the 20th anniversary of Hurricane Andrew approaching, hurricanes are on many peoples' minds in the insurance industry. That might explain why many of the questions for Dr. Megan Linkin, a meteorologist and the insurer's natural hazards expert, had to do with that particular kind of peril.
Linkin said that despite a lack of U.S. landfall for major storms, the amount of named storms -- those that are tropical storm level or stronger -- is above average over the past two years. Landfall, she says, is linked to weather in the short -- not climate, which is a broader view.
"Those weather patterns that draw storms to mainland change every five to seven days," she noted.
It's hard to include the possible effects of climate change in catastrophe models, she added, due to the short range of storm data. But with reinsurance contracts revisited every year, each contract brings greater awareness of the changing face of risk.
"It's in the next 30 years or so that we'll see the impact," she added.
Linkin and Mark Way, head of sustainability for the Americas at Swiss Re, both noted the amount of buildup in value on the coasts over the past several years.
"That's really what's driving the increase in insured losses" from about $5 billion a year in 1989 to $30 billion now, Way says. "And at the same time, no one says climate is going to be less severe in the future."