Warming of the Oceans and Implications for the (Re)Insurance Industry
This report from the Geneva Association gives an overview of the detected changes in the oceans and their impact on extreme events and hazard probabilities over the last few decades. It summarizes the changes in risk management strategies that (re)insurance companies can implement in order to address the new situation appropriately, comply with regulatory requirements and ultimately improve their ratings.
The report opens describing the evidence for ocean warming since the mid-20th century, with the majority of report detailing the impact of ocean warming on extreme events. The drivers addressed include sea level rise, intensified hydrological cycle, as well as dominant drivers for large-scale variations in the climate system. Other impacts discussed include tropical cyclones, extra-tropical winter storms, severe convective storms, and the uncertain future of the marine ecosystems.
There is a significant upward trend in the insured losses caused by extreme weather events. This is true for primary insurance, which is impacted by an increasing attritional loss burden caused by severe local weather events, as well as for reinsurance losses caused by large-scale catastrophic extreme events. The final chapter discusses this impact of ocean warming on the global insurance industry, providing an overview of the responses in internal risk management strategies, and potential strategies to help improve risk reduction measures.
Publication Date: June 2013
Author or Affiliated User:
- Falk Niehörster