An ongoing re-balancing discussion between hazard and exposure within reinsurance is needed: Inver Re – Reinsurance News
An ongoing re-balancing discussion between hazard and exposure ... Reinsurance News
sdgtalks
Changes in Exposure Exacerbate Impact of Climate Change on Hurricane Losses
A recent report by Inver Re highlights the significant impact of changes in exposure on hurricane losses, exacerbating the effects of climate change. The report emphasizes the need for ongoing discussions and re-balancing between hazard and exposure within the reinsurance industry.
The Role of Sustainable Development Goals (SDGs)
The report emphasizes the importance of considering the Sustainable Development Goals (SDGs) in addressing the impact of climate change on hurricane losses. While climate change is a significant factor, changes in exposure, such as increased coastal populations and rising replacement costs, have a greater impact on the increasing cost of hurricane events.
Impact of Exposure on Hurricane Risk
The report breaks down hurricane risk into three components: vulnerability, hazard, and exposure. While improvements in building codes and climate adaptation measures aim to reduce vulnerability, changes in hazard and exposure have a more material impact on hurricane risk.
Climate Change and Hazard Factors
Studies have shown that climate change affects hazard factors such as windspeed, precipitation, and storm surge. The increase in windspeed can be attributed to the impact of climate change on sea surface temperatures. However, the impact on relative precipitation is less clear, and the causes of changes in hurricane translation speed are still uncertain.
Increase in Exposure
Significant population growth in coastal states, particularly Florida, has led to a higher number of properties exposed to hurricane hazards. Additionally, annual replacement cost inflation has outpaced the Consumer Price Index (CPI), resulting in increased value of buildings exposed to hurricane risks.
The Multiplicative Effect of Hazard and Exposure
The report highlights the multiplicative effect of hazard and exposure on economic losses. The combination of severe hurricane events, replacement cost inflation, and demographic trends makes it challenging to accurately predict and price hurricane risk.
Estimating Economic Losses
Inver Re’s data analysis reveals a clear relationship between windspeed, precipitation, storm surge, and economic loss. Using this data, they have developed a model that estimates the relative effect of hazard and exposure on economic losses. The results indicate that climate change accounts for a portion of the increase in economic losses, but inflationary and demographic effects play a more significant role.
The Need for Rebalancing the Discussion
Inver Re concludes that ongoing discussions and rebalancing between hazard and exposure are necessary to effectively address North Atlantic hurricane risk. Accurate and up-to-date exposure data, along with rate changes reflecting inflationary dynamics, will better equip reinsurers to navigate the changing landscape of hurricane risk.
SDGs, Targets, and Indicators
1. Which SDGs are addressed or connected to the issues highlighted in the article?
- SDG 11: Sustainable Cities and Communities
- SDG 13: Climate Action
The article discusses the impact of climate change on hurricane losses and the need for a re-balancing of the discussion between hazard and exposure within a reinsurance context. This connects to SDG 11, which focuses on creating sustainable cities and communities, including resilient infrastructure and disaster risk reduction. It also relates to SDG 13, which addresses climate action and the need to combat climate change and its impacts.
2. What specific targets under those SDGs can be identified based on the article’s content?
- SDG 11.5: By 2030, significantly reduce the number of deaths and the number of people affected and substantially decrease the direct economic losses relative to global gross domestic product caused by disasters, including water-related disasters, with a focus on protecting the poor and people in vulnerable situations.
- SDG 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries.
The article highlights the need to mitigate the potentially catastrophic effects of climate change within the context of North Atlantic hurricane risk. This aligns with SDG 11.5, which aims to reduce economic losses caused by disasters. It also emphasizes the importance of strengthening resilience and adaptive capacity to climate-related hazards, which corresponds to SDG 13.1.
3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?
- Number of deaths and people affected by hurricanes
- Direct economic losses caused by hurricanes relative to global gross domestic product
- Resilience and adaptive capacity to climate-related hazards and natural disasters
The article does not explicitly mention specific indicators, but the identified targets can be measured using indicators such as the number of deaths and people affected by hurricanes, the direct economic losses caused by hurricanes relative to global GDP, and the level of resilience and adaptive capacity to climate-related hazards and natural disasters.
Table: SDGs, Targets, and Indicators
| SDGs | Targets | Indicators |
|---|---|---|
| SDG 11: Sustainable Cities and Communities | 11.5: By 2030, significantly reduce the number of deaths and the number of people affected and substantially decrease the direct economic losses relative to global gross domestic product caused by disasters, including water-related disasters, with a focus on protecting the poor and people in vulnerable situations. | – Number of deaths and people affected by hurricanes – Direct economic losses caused by hurricanes relative to global gross domestic product – Resilience and adaptive capacity to climate-related hazards and natural disasters |
| SDG 13: Climate Action | 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries. | – Number of deaths and people affected by hurricanes – Direct economic losses caused by hurricanes relative to global gross domestic product – Resilience and adaptive capacity to climate-related hazards and natural disasters |
Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.
Source: reinsurancene.ws
Join us, as fellow seekers of change, on a transformative journey at https://sdgtalks.ai/welcome, where you can become a member and actively contribute to shaping a brighter future.
