Mark Weatherhead, Head of Model Development - International
While there is still uncertainty regarding the degree of impact from climate change, the likely consequences are subject to modelling. Increasing global temperatures are projected to impact the mid-latitude and polar regions more than the tropics.
This is expected to lead to two outcomes. First, the temperature gradient between the poles and the equator will drop, which will reduce storm formation. Second, the higher overall temperature will increase evaporation and the amount of water vapor in the atmosphere will lead to more intense storms. The projected impact of these two changes is increased frequency of both extreme rainfall events and extended dry periods in Europe.
As a result of these and other factors, the Intergovernmental Panel on Climate Change has identified three main areas of risk for Europe:
- That increases in sea levels, coastal erosion and peak river discharges, combined with increased urbanization, will lead to greater economic losses as a direct result of flooding.
- A reduction in water availability due to increased abstraction from river and groundwater and increased evaporative load will result in increased risk of drought conditions, especially in southern Europe.
- An increased occurrence of extreme heat events will impact human health, crops and the generation of wildfires.
In view of these projections, (re)insurers are working hard to gain a better understanding of their natural catastrophe risk through the use of catastrophe models.