(Reuters) – Devastation from tornadoes that hit parts of the United States this month will push the insurance industry's bill for weather-related claims by 2021 well above the projected $ 105 billion, industry experts said, and premiums should rise due to climate change concerns will lead to more severe weather.
Tornados tore a 200-mile road through six states in the Midwest and south, demolishing homes and leveling companies, causing $ 5 billion in insurance losses, according to preliminary estimates.
Climate change has driven more so-called "secondary risks" weather events that are smaller than hurricanes, for example, but less predictable. Other secondary hazards include small to medium-sized local events such as forest fires, winter storms and hailstorms.
These events create risk management challenges for insurance companies and ultimately increase premiums, said some insurance experts.
"We have a year on us. of over $ 100 billion in catastrophic events without having a major named event, whether it be an earthquake or a hurricane, says Barnaby Rugge-Price, chairman of the Howden Broking Group. "The most obvious is climate change," he said. rare in terms of season, intensity and length of storms, the company said.
Studies suggest that warming Gulf of Mexico surface temperatures are linked to intense thunderstorms u pdrafts that could generate tornadoes in the southeastern United States Dixie Alley, says disaster modeling company Karen Clark & Co.
Warmer air in late fall and early winter can create favorable conditions for producing tornadoes, which can prolong the severe weather season across North America, said Guy Carpenter.
Unlike primary hazards such as hurricanes, which have the highest potential for losses and therefore carefully monitored and modeled, secondary hazards are unpredictable.
They are more difficult to model due to insufficient data, Mr. Rugge-Price said, which in turn makes it harder for the industry to assess the risks.
"Hurricanes have been recorded, and we know the road and we know the damage, while tornadoes, they just … show up," he said.
Some experts said that it is not easy to draw a clear link between climate change and the increasing severity of tornadoes. The KCC said tornadoes form under specific atmospheric conditions and that it can be "challenging to attribute specific trends to climate change in severe weather." tornadoes hit, the global insurance industry faced an estimated $ 105 billion in losses this year, the fourth highest ever, without a single giant weather disaster, according to reinsurance giant Swiss Re.
While Hurricane Ida was the single most expensive natural disaster in 2021, more than half of the losses were related to secondary risk events including the winter storm Uri which brought freezing temperatures to Texas.
At least one serious annual secondary risk event is the new "norm", each resulting in more than $ 10 billion in losses, said Swiss Re. [19659002"Naturaldisasterlossesarelikelytocontinuetogrowinthefaceofrisingprosperityurbanizationandtheeffectsofclimatechange"thecompanysaidCustomerswithsignificantexposuretosecondaryhazardsexperiencedabove-averageinterestratehikesduringthethirdquartersaidSwissRebeforetheinsurancebegins
"We do not expect to see a reduction in available tornado coverage capacity," said Dave Reasons, Marsh's US Real Estate Manager in the Central Zone. But, he said, some customers were willing to carry retentions ten times higher than before to keep premiums low.
"We can really see discussions about the right retention, the right pricing for it."