Two-degree-warmer climate would increase average US hurricane losses by 40%, study finds

By Henry Gale

June 17 - (The Insurer) - Insured average annual losses from hurricanes in the U.S. would increase by around 40% compared to the present day under a climate scenario of 2 degrees Celsius above pre-industrial conditions, according to a research paper by Hiscox's Ed Pope and MS Amlin's Sam Phibbs.

The 1-in-200 aggregate exceedance probability loss would also increase by around 26% in this scenario, the authors said, while the eastern seaboard would face the greatest relative impacts.

Average annual losses in the states of Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont would increase by more than 60% compared to the present day under the scenario, according to the paper.

"Although the absolute increase in the number of landfalling tropical cyclones would be greatest along the coasts of the Gulf states and Florida … the greatest increase in relative landfalls occurs along the eastern seaboard," the authors said.

"These results suggest building codes applied in Gulf Coast states should be applied at higher latitudes to mitigate current and future impacts of climate change."

The authors said the assumptions in the study include a continued increase in tropical cyclone landfall frequencies and no changes in the uptake of insurance or mitigation measures. It also does not take into account how changes in sea level could affect storm surge or rainfall-induced flooding.

The article was published in the Journal of Catastrophe Risk and Resilience this month. It was written by Pope, who served as senior research analyst at MS Amlin before joining Hiscox as natural catastrophe lead last month, and Phibbs, MS Amlin's head of catastrophe research. The research used an MS Amlin event catalogue and a climate change dataset provided by modelling firm Reask.

A November 2024 study published by researchers at ILS investment manager LGT Capital Partners had concluded that a 2-degree Celsius warming scenario would lead to a 10% increase in average annual losses.