Natural Hazards

, Volume 16, Issue 2–3, pp 135–163 | Cite as

Climate Change, Extreme Events and the Canadian Insurance Industry

  • Rodney White
  • David Etkin
Article

Abstract

At the same time that a scientific consensus has arisen that the world will most likely experience a changing climate in the near future, with more frequent extreme events of some weather hazards, the insurance industry, worldwide, has been hit with rapidly escalating costs from weather-related disasters. This conjunction of scientific belief and economic impact has raised the questions as to (1) whether more frequent extreme events have contributed to the rising insurance costs and (2) how will future climate change affect the industry?

Based upon historical data, it is difficult to support the hypothesis that the recent run of disasters both world-wide and in Canada are caused by climate change; more likely other factors such as increased wealth, urbanization, and population migration to vulnerable areas are of significance.

It seems likely, though, that in the future some extreme events such as convective storms (causing heavy downpours, hail and tornadoes), drought and heat waves will result in increased costs to the industry, should the climate change as anticipated.

climate change extreme events insurance 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Agee, M.: 1991, Trends in cyclone and anticyclone frequency and comparison with periods of warming and cooling over the northern hemisphere, J. Climate 4, 263–267.Google Scholar
  2. Arrhenius, E. and Waltz, T.: 1990, Minimizing the greenhouse effect, in: Alcira Kreimer and Mohan Munasinghe (eds.), Managing Natural Disasters and the Environment, World Bank, June 27–28, Washington, D.C.Google Scholar
  3. Balling, R.C. and Lawson, M.P.: 1982, Twentieth century changes in winter climatic regions, Climatic Change 4, 57–69.Google Scholar
  4. Barrow, E.M. and Hulme, M.: 1996, Changing probabilities of daily temperature extremes in the UK related to future global warming and changes in climate variability, Climate Res. 6, 21–31.Google Scholar
  5. Beer, T. and Williams, A.: 1995, Estimating Australian forest fire danger under conditions of doubled carbon dioxide concentrations, Climatic Change 29, 169–188.Google Scholar
  6. Berz, G.: 1988, Climatic change: Impact on international reinsurance, in: G.I. Pearman (ed.), Greenhouse. Preparing for Climate Change, CIRO, pp. 579–587.Google Scholar
  7. Berz, G.: 1993, Globalwarming and the insurance industry, Interdisciplinary Sci. Rev. 18(2), 120–125.Google Scholar
  8. Berz, G. and Conrad, K.: 1994, Stormy weather: the mounting windstorm risk and consequences for the insurance industry, Ecodecision, April, 65–68.Google Scholar
  9. Broccoli, A.J. and Manabe, S.: 1990, Can existing climate models be used to study anthropogenic changes in tropical cyclone climate, Geophys. Res. Lett. 17(11), 1917–1920.Google Scholar
  10. Broecker, W.S.: 1995, Chaotic climate, Scientific American November, 62–68.Google Scholar
  11. Brun, S.E., Etkin, D., Law, D.G., Wallace, L., and White, R.: 1997, Coping with natural hazards in Canada: Scientific, government and insurance industry perspectives, Insurers' Advisory Org. Inc., Toronto, Canada, 217 pp.Google Scholar
  12. Carnell, R.E., Senior, C.A., and Mitchell, J.F.B.: 1996, An assessment of measure of storminess: Simulated changes in northern hemisphere winter due to increasing CO2, Climate Dynamics 12, 467–476.Google Scholar
  13. Changnon, S.A. and Changnon, J.M.: 1992, Temporal fluctuations in weather disasters: 1950–1989, Climatic Change 22, 191–208.Google Scholar
  14. Cubash, U., Waszkewitz, J., Hegerl, G., and Perlwitz, J.: 1995, Regional climate changes as simulated in time slice experiments. MPI Report 153, Climatic Change 31, 273–304.Google Scholar
  15. Dlugolecki, A., Elvy, C., Kirby G., Salthouse, R., Turner, S., Witt, D., Martin, R., Toomer, C., Secrett, B., Palutikoff, J., and Clement, D.: 1994, Task force on 'The impact of changing weather patterns on property insurance', Chartered Insurance Institute, London, May, 87 pp.Google Scholar
  16. Emmanuel, K.A.: 1987, The dependence of hurricane intensity on climate, Nature 326, 483–484.Google Scholar
  17. Emmanuel, K.A.: 1995, Comments on 'Global climate change and tropical cyclones': Part 1,BAMS 76(11), 2241–2244.Google Scholar
  18. Environment Canada: 1988, Conference Statement from `The Changing Atmosphere: Implications for Global Security', Toronto, June 27–30.Google Scholar
  19. Environment Canada: 1996, Summer 1996–The Season That Almost Wasn't, Accessed from website hhttp.//www.on.doe.ca./commi, September 18.Google Scholar
  20. Evans, J.L.: 1993, Sensitivity of tropical cyclone intensity to sea surface temperature, J. Climate 6, 1133–1140.Google Scholar
  21. Etkin, D.A.: 1995, Beyond the year 2000, more tornadoes in western canada? Implications from the historical record, Natural Hazards 12, 19–27.Google Scholar
  22. Gordon, H.B., Whetton, P.H., Pittock. A.B., Fowler, A.M., and Haylock, M.R.: 1992, Simulated changes in daily rainfall intensity due to the enhanced greenhouse effect: Implications for extreme rainfall events, Climate Dynamics 8, 83–102.Google Scholar
  23. Griffiths, D.J., Colquhoun, J.R., Batt, K.L., and Casinadar, T.R.: 1993, Severe thunderstorms in New South Wales: Climatology and means of assessing the impact of climate change, Climatic Change 25, 369–388.Google Scholar
  24. Haarsma, R.J., Mitchell. J.F.B., and Senior, C.A.: 1993, Tropical disturbances in a GCM, Climate Dynamics 8, 247–257.Google Scholar
  25. Hague, K.: 1996, Derivatives: bridge to the capital markets Canadian Underwriter, April 1996, 30–35.Google Scholar
  26. Haines, A., Epstein, P., and McMichael, A.: 1993, Global health watch: Monitoring impacts of environmental change, The Lancet 342, 1454–69.Google Scholar
  27. Hall, N.M.J., Hoskins, B.J., Valdes, P.J., and Senior, C.A.: 1994, Storm tracks in a high resolution GCM with doubled CO2. Quart. J. Royal Meteorol. Soc. 120, 1209–1230.Google Scholar
  28. Hansen, J., Fung, I., Lacis, A., Rind, D., Lebedoff, S., Ruedy, R., and Russel, G.: 1988, Global climate changes as forecast by GISS's threedimensional model, J. Geophys. Res. 93, 9341–9364.Google Scholar
  29. Held, I.M.: 1993, Largescale dynamics and global warming, BAMS 74(2), 228–241.Google Scholar
  30. Hennessy, K.J. and Pittock, A.B.: 1995, Greenhouse warming and threshold temperature events in Victoria, Australia, Int. J. Climatology 15, 591–612.Google Scholar
  31. Hogg, W.D.: 1996, Cycles and trends in time series of Canadian extreme rainfall, unpublished manuscript, Environment Canada, Downsview.Google Scholar
  32. Holton, R.B.: 1987, Underwriting Principles and Practices, 3rd edn., The National Underwriter Company, Hoboken, N.J., USA.Google Scholar
  33. Hughes, M.K and Brown, P.M.: 1992, Drought frequency in Central California since 101 BC. Recorded in giant sequoia tree rings, Climate Dynamics 6, 161–167.Google Scholar
  34. Hulme, M.: 1992, Rainfall changes in Africa: 1931–1960 to 1961–1990. Int. J. Climatology 12. 685–690.Google Scholar
  35. Idso, S.B., Balling, R.C., and Cerveny, R.S.: 1990, carbon dioxide and hurricanes: Implications of northern hemispheric warming for Atlantic/Caribbean storms, Meteorol. Atmos. Phys. 42, 259–263.Google Scholar
  36. Insurance Institute for Property Loss Reduction: 1994, Understanding the Wind Peril, BostonGoogle Scholar
  37. Insurance Institute of Ontario: 1991, Dictionary of Insurance, Toronto.Google Scholar
  38. IPCC: 1995, Climate Change 1995: Impacts, Adaptations, and Mitigation, Summary for Policy makers. Contributions ofWorking Group II to the Second Assessment Report of the Intergovernmental Panel on Climate Change, WMO and UNEP.Google Scholar
  39. IPCC: 1995, Climate Change 1995: in: J.T. Houghton, L.G. Meira Filho, B.A. Callander, N. Harris, A. Kattenberg, and K. Maskell (eds), The Science of Climate Change, Cambridge University Press.Google Scholar
  40. Karl, T.R., Knight, R.W., Easterling, D.R., and Quayle, R.G.: 1995, Indices of climate change for the United States, Bull. Am. Meteorol. Soc. 77(2), 279–292.Google Scholar
  41. Karl, T.R., Knight, R.W., and Plummer, N.: 1995, Trends in high frequency climate variability in the twentieth century, Nature 377, 217–220.Google Scholar
  42. Khandekar, M.L. and Swail, V.R.: 1995, Storm waves in Canadian waters: A major marine hazard, Atmos.-Ocean 33(2), 303–328.Google Scholar
  43. Karl, T.R., Knight, R.W., Easterling, D.R., and Quayle, R.G.: 1995, Trends in U.S. climate during the twentieth century, Consequences (Saginaw Valley State University), 1(1), 2–12.Google Scholar
  44. Katz, R.W. and Brown, B.G.: 1992, Extreme events in a changing climate: Variability is more important than averages, Climatic Change 21, 289–302.Google Scholar
  45. Kovacs, P.: 1997, Insurance Bureau of Canada.Google Scholar
  46. Kurz, W.A. and Apps, M.J.: 1996, Retrospective assessment of carbon flows in Canadian boreal forests, Forest Ecosystems, Forest Management and the Global Carbon Cycle, NATO ASI series, vol. 1,40, 173–182.Google Scholar
  47. Lambert, S.J.: 1995, The effect of enhanced greenhouse warming on winter cyclone frequencies and strengths, J. Climate 8, 1447–1452.Google Scholar
  48. Lambert, S.J.: 1996, Intense extratropical northern hemisphere winter cyclone events: 1899–1991, J. Geophys. Res. 101(D16) 21, 319–21,325.Google Scholar
  49. Landsea, C.W., Nicholls, N., Gray, W.M., and Avila, L.A.: 1996, Downward trends in the frequency of intense Atlantic hurricanes during the past five decades, Geophys. Res. Lett. 23, 1697–1700.Google Scholar
  50. Lawford, R.G., Prowse, T.D., Hogg. W.D., Warkentin, A.A., and Pilon, P.J.: 1995, Hydrometeorlogical aspects of flood hazards in Canada, Atmos. Ocean 33(2), 303–328.Google Scholar
  51. Leathers, D.J. and Ellis, A.W.: 1996, Synoptic mechanisms associated with snowfall increases to the Lee of Lakes Erie and Ontario, Internat. J. Climatol. 16, 1117–1135.Google Scholar
  52. Leggett, J.: 1994, Climate change and the financial sector, Lecture delivered to the Society of Fellows, Chartered Insurance Institute, London, November 1.Google Scholar
  53. Lighthill, J., Holland, G., Gray, W., Landsea, C., Craig, G., Evans, J., Kurihara, Y.m and Guard, C.: 1994, Global climate change and tropical cyclones, BAMS 75(11), 2147–2157.Google Scholar
  54. Manabe, S and Stouffer, R.J.: 1988, Two stable equilibria in a coupled oceanatmosphere model, J. Climate 1, 841–866.Google Scholar
  55. Maybank, J., Bonsal, B., Jones, K., Lawford, R., O'Brian, E.G., Ripley, E.A., and Wheaton, E.: 1995, Drought as a natural disaster, Atmos. Ocean 33(2), 195–222.Google Scholar
  56. Mearns, L.O., Katz, R.W., and Schneider, S.H.: 1984, Extreme hightemperature events: Changes in their probabilities with changes in mean temperature, J. Climate Appl. Meteorol 23, 1601–1613.Google Scholar
  57. Mearns, L.O., Giorgi, F., McDaniel, L., and Shields, C.: 1995, Analysis of variability and diurnal range of daily temperature in a nested regional climate model: Comparison with observations and doubles CO2 results, Climate Dynamics 11, 193–209.Google Scholar
  58. Meehl, G.A.: 1993, Changes of variability in a climate with increased CO2: El NinoSouthern oscillation and the Asian summer monsoon, In Tol (1993).Google Scholar
  59. Mitchell, J.F.B. and Ingram, W.J.: 1990, On CO2 and climate. Mechanisms of changes in cloud, J. Climate 35, 5–21.Google Scholar
  60. Munich Re: 1990, Windstorm — New Dimensions of a Natural Hazard, Munich.Google Scholar
  61. Munich Re: 1996, Annual Review of Natural Catastrophes 1995. Extract from the Preprint, 7.Google Scholar
  62. National Science and Technology Council: 1996, Natural Disaster Reduction: A Plan for the Nation. The White House, Washington, USA.Google Scholar
  63. National Underwriter, March 18, 1996, Voluntary market facility set up for New York coastal risks, 40, 41.Google Scholar
  64. National Underwriter, March 25th, 1996, Florida property insurers balk at sweeping package of reforms, p. 33.Google Scholar
  65. National Underwriter: April 1st 1996, California jury hands Lloyd's pollution win.Google Scholar
  66. NOAA, 1995: July 1995 Heat Wave, Natural Disaster Survey Report, National Weather Service, Silver Spring, Maryland, 53 pp.Google Scholar
  67. Noda, A. and Tokioka, T.: 1989, The effect of doubling CO2 concentration on convective and nonconvective precipitation in a general circulation model coupled with a simple mixed layer ocean, J. Met. Soc. Japan 67, 95–110.Google Scholar
  68. Oladipo, E.O.: 1993, Drought in Northern Nigeria: An indication of abrupt climatic change, Weather and Climate 13, 34–39.Google Scholar
  69. Pang, A.: 1997, AON Re.Google Scholar
  70. Parey, S.: 1994, Simulations de trente ans 1 × CO2, 2 × CO2, 3 × CO2 avec le modèle du LMD (64 × 50 × 11) premiers résultants, EDF, Direction des études et recherches, HE-33/ 94/008.Google Scholar
  71. Pielke Jr., R.A. and Landsea, C.W.: 1997, Normalized hurricane damages in the U.S.: 19250–1995, Draft paper. Http://www.dir.ucar.edu/esig/HP_roger/hurr_norm.htm.Google Scholar
  72. Rowntree, P.: 1993, Workshop on 'socioEconomic and Policy Aspects of Change of Incidence and Intensity of Extreme Weather Events', Institute for Environmental Studies, W93/15, Free University, Amsterdam, June 24–25, 1993.Google Scholar
  73. Price, C. and Rind, D.: 1993, Lightning fires in a 2 × CO2 world, in Proc. 12th Conference on Fire and Forest Meteorology, Oct. 26–28, Jekyll Is., Georgia, pp. 77–84.Google Scholar
  74. Reinsurance: 1996, Megacities under threat, 26(10), 28–29.Google Scholar
  75. Rind, D., Goldberg, R., and Ruedy, R.: 1989, Change in climate variability in the 21st century,Climate Change 14, 5–38.Google Scholar
  76. Ross, A.: 1996, Climatic change and its impact on the Canadian insurance industry, seminar delivered at the Institute for Environmental Studies, University of Toronto, February 29th.Google Scholar
  77. Ross, R.J. and Elliot, W.P.: 1996, Tropospheric water vapor climatology and trends over North America: 1973–93, J. Climate 9, 3561–3574.Google Scholar
  78. Ryan, B.F., Watterson, IG., and Evans, J.L.: 1992, Tropical cyclone frequencies inferred fromGary's yearly genesis parameter: Validation of GCMtropical climates, Geophys. Res. Lett. 19(18), 1831–1834.Google Scholar
  79. Singer, S.F., Boe, B.A., Decker, F.W., Frank, N., Gold, T., Gray, W., Linden, H., Lindzen, R., Michaels, P.J., Nierenberg, W.A., Porch, W., and Stevenson, R.: 1997, Comments on 'Open Letter to Ben Santer', BAMS 78(1), 81–82.Google Scholar
  80. Skaggs, R.H., Baker, D.G., and Ruschy, D.L.: 1995, Interannual variability characteristics of the Eastern Minnesota (USA) temperature record: Implications for climate change studies, Climate Res. 5, 223–227.Google Scholar
  81. Slivitzky, M. and Morin, G.: 1996, Impacts of climatic changes on the hydrological regime: The Moisie River case revisited, CMOS Bull. 24(4), 77–81.Google Scholar
  82. Smith, D.I.: 1993, Greenhouse climatic change and flood damages, the implications, Climatic Change 25, 319–333.Google Scholar
  83. Stein, O. and Hense, A.: 1994, A reconstructed time series of the number of extreme low pressure events since 1880, Meteorol. Zeit. 3, 43–46.Google Scholar
  84. Street, R.B.: 1989, Climate change and forest fires in Ontario, in Proc., 10th Conference on Fire and Forest Meteorology, Ottawa, Ontario, pp. 177–181.Google Scholar
  85. Swiss Re: 1994, Global Warming: Element of Risk, Zurich.Google Scholar
  86. Wall Street Journal: October 10th 1996, 'Nationwide To Unveil Rules To Cut Risks After Hurricanes'Google Scholar
  87. Tol, R. S. J. (ed.): 1993, Socio-economic and policy aspects of changes in the incidence and intensity of extreme weather events, institute for environmental studies, W93/15, Free University, Amsterdam, June 24–25.Google Scholar
  88. Vance, R. E.: 1991, A Paleobotanical study of holocene drought frequency in Southern Alberta, PhD Thesis, University of British Columbia, 180 pp.Google Scholar
  89. Wetherald, R. T. and Manabe, S.: 1995, The mechanisms of summer dryness induced by greenhouse warming, J. Climate 8, 3096–3108.Google Scholar
  90. Whetton, P. H. J., Fowler, A. M., Haylock, M. R., and Pittock, A. B.: 1993, Implications of climate change due to the enhanced greenhouse effect on floods and droughts in Australia, Climatic Change 25, 289–317.Google Scholar
  91. Wigley, T. M. L.: 1988, The effect of changing climate on the frequency of absolute extreme events, Climate Monitor 17, 44–55.Google Scholar
  92. Wilson, C. A. and Mitchell, J. F. B.: 1987, Simulated climate and CO2 induced climate change over Western Europe, Climatic Change 10, 11–42.Google Scholar
  93. Zwiers, F.W.: 1994, Changes in screen temperature extremes under a doubling of CO2, in G. J. Boer (ed.), Research Activities in Atmospheric and Oceanic Modelling, 7.44–7.46, CAS/JSC Working Group Numerical Experimentation, Report 19, Feb., WMO/TD-No 592.Google Scholar

Copyright information

© Kluwer Academic Publishers 1997

Authors and Affiliations

  • Rodney White
    • 1
  • David Etkin
    • 2
  1. 1.Institute for Environmental StudiesUniversity of TorontoTorontoCanada
  2. 2.Environmental Adaptation Research Group, Environment CanadaUniversity of TorontoTorontoCanada

Personalised recommendations