There’s only one direction for insurance costs related to climate events to move in the years ahead—upward, according to a report published today about the implications of ocean warming for the property insurance industry.
Executive SummaryA new report issued by The Geneva Association reviews research on ocean heat content and the implications of ocean warming for insurers and reinsurers, suggesting that the industry needs to change catastrophe risk-estimation approaches in a non-stationary climate environment and work to increase community resilience. The report notes that even if greenhouse gas emissions stop tomorrow, oceanic warming will still continue for centuries.
The report, released by The Geneva Association, cites a growing body of evidence confirming the loss severity impacts of ocean warming. It also stresses the need for insurers and reinsurers to embrace new methods of estimating catastrophe risk. Historical data-driven approaches will fail in a non-stationary environment in which dynamic climate changes are occurring, the report says.
An eye-opening assertion presented early in the report states that not only do scientists now generally agree that global warming is detectable—and most likely attributable to greenhouse gases emitted through human activity—but also that even if emissions completely stopped tomorrow, oceanic temperatures would still continue to rise for centuries.
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