European Flood risk average insured loss could increase by up to 59 percent by 2050, while North Atlantic Hurricane wind could increase by as much as 24 percent by 2050, according to new climate change models released by catastrophe risk modeler RMS.
The new models combine the RMS financial impact modelling framework with the best climate science consensus, including from the Intergovernmental Panel on Climate Change (IPCC). Generally available in June 2021, RMS claims these models provide the most comprehensive climate change insights for North Atlantic Hurricane, Europe Inland Flood, and Europe Windstorm.
Each model quantifies and differentiates the impacts of acute physical risk due to variable potential climate change scenarios (known as Representative Concentration Pathways or RCPs), different time horizons, and within specific regions.
RMS said that this means that organisations can make more informed decisions about the impact of climate change on different physical assets and portfolios, including residential and commercial properties, warehouses, and retail chains. Further climate change models and geographies will follow this initial model suite launch.
Speaking at the annual RMS Exceedance conference, RMS chief research officer Robert Muir-Wood, said: “Unpacking the risks from climate change includes many individual perils, components, and situations, some of which are profoundly non-linear. Also, when mediated through tropical cyclone size, intensity and track, winter storms or major river floods, the relationship between climate parameters and their impacts becomes highly complex and can only be captured in a full catastrophe modelling capability that we are now delivering.”
“Clear metrics on current and future climate perils, such as those available with the RMS climate change models and solutions, are becoming vital for the insurance industry, businesses, and investors globally. Increases in frequency and intensity of hurricanes, floods, and wildfires have already driven businesses, investors, and regulators to try to assess what this means for their current and future operations.”
Learn more about RMS Climate Change Solutions here: https://www.rms.com/climate-change