Aeolus Research explores the relationship between hurricane risk and the changing climate

Aeolus is excited to announce the release of the second paper in its climate change research series.

In part 1 of the series Dr. Peter Dailey, Head of Research at Aeolus, introduced the foundations of climate change science and described how climate models provide a deeper understanding of the environment in which we live today and the uncertainties around how our climate may evolve in the future.

In part 2, Dr. Dailey has probed more deeply into how the warming atmosphere, and more importantly, the warming oceans, may influence one of nature's most powerful and destructive weather systems - the tropical cyclone. Some of the most interesting observations include:

1.) Since the mid 1990's, the Atlantic Ocean has been warmer than the long-term average, and since ocean heat content is the primary fuel source for hurricanes, we logically expect more and/or stronger hurricanes in the current climate. The insurance and reinsurance markets are tasked with quantifying hurricane risk under current climate conditions, hence the historical record is a key input to decision-making.

2.) Recent experience in the U.S. has shown that Atlantic hurricanes are becoming much more costly which is likely a result of both increased exposure value in the path of landfalling hurricanes as well as an increase in hurricane damage potential driven by warmer ocean temperatures.

3.) Statistical analysis of historical hurricane counts does not reveal a very robust signal that climate change has caused more hurricanes to form in the past century. Still, warmer ocean temperatures and other climate factors are likely leading to stronger hurricanes and in turn, rising costs to rebuild.

4.) Advances in fine-scale (weather) and global-scale (climate) modeling have provided a deeper understanding of the sensitivity of hurricanes to the ingredients required for hurricanes to develop and intensify.

Our clients enjoy unique access to our research team and their industry-leading expertise. Working closely with our underwriters, our research team helps inform our view of risk. To find out more, and access the full research paper, please reach out to your usual Aeolus contact or email us at [email protected].