The Impact of Climate Change on Catastrophe Risk Model : Implications for Catastrophe Risk Markets in Developing Countries
Catastrophe risk models allow insurers, reinsurers and governments to assess the risk of loss from catastrophic events, such as hurricanes. These models rely on computer technology and the latest earth and meteorological science information to generate thousands if not millions of simulated events....
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ftworldbank:oai:openknowledge.worldbank.org:10986/4152 2024-09-15T18:24:11+00:00 The Impact of Climate Change on Catastrophe Risk Model : Implications for Catastrophe Risk Markets in Developing Countries Seo, John Mahul, Olivier 2009-06-01 application/pdf text/plain https://hdl.handle.net/10986/4152 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090608163227 English eng Policy Research working paper no. WPS 4959 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090608163227 https://hdl.handle.net/10986/4152 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank ATLANTIC HURRICANE ATLANTIC HURRICANES CASUALTY CATASTROPHE COVERAGE CATASTROPHE FUND CATASTROPHE INSURANCE CATASTROPHE REINSURANCE CATASTROPHE RISK FINANCING CATASTROPHIC EVENTS CATASTROPHIC RISKS CLIMATE CLIMATE CHANGE COST OF CAPITAL COST OF INSURANCE COST OF REINSURANCE DAMAGES DEVELOPMENT NETWORK DISASTER DISASTER FINANCING DISASTER REDUCTION DISASTER RISK DISASTER RISK REDUCTION DONOR COMMUNITY EARTHQUAKE EARTHQUAKES ECONOMIC RISKS HURRICANE HURRICANE CATASTROPHE HURRICANE CENTER HURRICANE DAMAGE HURRICANE FREQUENCY HURRICANE INSURANCE HURRICANE INTENSITY HURRICANE RISK HURRICANES INCOME INFLATION INSURANCE INSURANCE INDUSTRY INSURANCE MARKET INSURANCE MARKETS INSURANCE PREMIUMS INSURANCE REGULATION INSURANCE SYSTEMS INSURED LOSSES INSURER INSURERS INTENSE STORMS MAJOR HURRICANES MITIGATION 2009 ftworldbank 2024-08-13T00:17:24Z Catastrophe risk models allow insurers, reinsurers and governments to assess the risk of loss from catastrophic events, such as hurricanes. These models rely on computer technology and the latest earth and meteorological science information to generate thousands if not millions of simulated events. Recently observed hurricane activity, particularly in the 2004 and 2005 hurricane seasons, in conjunction with recently published scientific literature has led risk modelers to revisit their hurricane models and develop climate conditioned hurricane models. This paper discusses these climate conditioned hurricane models and compares their risk estimates to those of base normal hurricane models. This comparison shows that the recent 50 year period of climate change has potentially increased North Atlantic hurricane frequency by 30 percent. However, such an increase in hurricane frequency would result in an increase in risk to human property that is equivalent to less than 10 years worth of US coastal property growth. Increases in potential extreme losses require the reinsurance industry to secure additional risk capital for these peak risks, resulting in the short term in lower risk capacity for developing countries. However, reinsurers and investors in catastrophe securities may still have a long-term interest in providing catastrophe coverage in middle and low-income countries as this allows reinsurers and investors to better diversify their catastrophe risk portfolios. Other/Unknown Material North Atlantic The World Bank: Open Knowledge Repository (OKR) |
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The World Bank: Open Knowledge Repository (OKR) |
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ftworldbank |
language |
English |
topic |
ATLANTIC HURRICANE ATLANTIC HURRICANES CASUALTY CATASTROPHE COVERAGE CATASTROPHE FUND CATASTROPHE INSURANCE CATASTROPHE REINSURANCE CATASTROPHE RISK FINANCING CATASTROPHIC EVENTS CATASTROPHIC RISKS CLIMATE CLIMATE CHANGE COST OF CAPITAL COST OF INSURANCE COST OF REINSURANCE DAMAGES DEVELOPMENT NETWORK DISASTER DISASTER FINANCING DISASTER REDUCTION DISASTER RISK DISASTER RISK REDUCTION DONOR COMMUNITY EARTHQUAKE EARTHQUAKES ECONOMIC RISKS HURRICANE HURRICANE CATASTROPHE HURRICANE CENTER HURRICANE DAMAGE HURRICANE FREQUENCY HURRICANE INSURANCE HURRICANE INTENSITY HURRICANE RISK HURRICANES INCOME INFLATION INSURANCE INSURANCE INDUSTRY INSURANCE MARKET INSURANCE MARKETS INSURANCE PREMIUMS INSURANCE REGULATION INSURANCE SYSTEMS INSURED LOSSES INSURER INSURERS INTENSE STORMS MAJOR HURRICANES MITIGATION |
spellingShingle |
ATLANTIC HURRICANE ATLANTIC HURRICANES CASUALTY CATASTROPHE COVERAGE CATASTROPHE FUND CATASTROPHE INSURANCE CATASTROPHE REINSURANCE CATASTROPHE RISK FINANCING CATASTROPHIC EVENTS CATASTROPHIC RISKS CLIMATE CLIMATE CHANGE COST OF CAPITAL COST OF INSURANCE COST OF REINSURANCE DAMAGES DEVELOPMENT NETWORK DISASTER DISASTER FINANCING DISASTER REDUCTION DISASTER RISK DISASTER RISK REDUCTION DONOR COMMUNITY EARTHQUAKE EARTHQUAKES ECONOMIC RISKS HURRICANE HURRICANE CATASTROPHE HURRICANE CENTER HURRICANE DAMAGE HURRICANE FREQUENCY HURRICANE INSURANCE HURRICANE INTENSITY HURRICANE RISK HURRICANES INCOME INFLATION INSURANCE INSURANCE INDUSTRY INSURANCE MARKET INSURANCE MARKETS INSURANCE PREMIUMS INSURANCE REGULATION INSURANCE SYSTEMS INSURED LOSSES INSURER INSURERS INTENSE STORMS MAJOR HURRICANES MITIGATION Seo, John Mahul, Olivier The Impact of Climate Change on Catastrophe Risk Model : Implications for Catastrophe Risk Markets in Developing Countries |
topic_facet |
ATLANTIC HURRICANE ATLANTIC HURRICANES CASUALTY CATASTROPHE COVERAGE CATASTROPHE FUND CATASTROPHE INSURANCE CATASTROPHE REINSURANCE CATASTROPHE RISK FINANCING CATASTROPHIC EVENTS CATASTROPHIC RISKS CLIMATE CLIMATE CHANGE COST OF CAPITAL COST OF INSURANCE COST OF REINSURANCE DAMAGES DEVELOPMENT NETWORK DISASTER DISASTER FINANCING DISASTER REDUCTION DISASTER RISK DISASTER RISK REDUCTION DONOR COMMUNITY EARTHQUAKE EARTHQUAKES ECONOMIC RISKS HURRICANE HURRICANE CATASTROPHE HURRICANE CENTER HURRICANE DAMAGE HURRICANE FREQUENCY HURRICANE INSURANCE HURRICANE INTENSITY HURRICANE RISK HURRICANES INCOME INFLATION INSURANCE INSURANCE INDUSTRY INSURANCE MARKET INSURANCE MARKETS INSURANCE PREMIUMS INSURANCE REGULATION INSURANCE SYSTEMS INSURED LOSSES INSURER INSURERS INTENSE STORMS MAJOR HURRICANES MITIGATION |
description |
Catastrophe risk models allow insurers, reinsurers and governments to assess the risk of loss from catastrophic events, such as hurricanes. These models rely on computer technology and the latest earth and meteorological science information to generate thousands if not millions of simulated events. Recently observed hurricane activity, particularly in the 2004 and 2005 hurricane seasons, in conjunction with recently published scientific literature has led risk modelers to revisit their hurricane models and develop climate conditioned hurricane models. This paper discusses these climate conditioned hurricane models and compares their risk estimates to those of base normal hurricane models. This comparison shows that the recent 50 year period of climate change has potentially increased North Atlantic hurricane frequency by 30 percent. However, such an increase in hurricane frequency would result in an increase in risk to human property that is equivalent to less than 10 years worth of US coastal property growth. Increases in potential extreme losses require the reinsurance industry to secure additional risk capital for these peak risks, resulting in the short term in lower risk capacity for developing countries. However, reinsurers and investors in catastrophe securities may still have a long-term interest in providing catastrophe coverage in middle and low-income countries as this allows reinsurers and investors to better diversify their catastrophe risk portfolios. |
author |
Seo, John Mahul, Olivier |
author_facet |
Seo, John Mahul, Olivier |
author_sort |
Seo, John |
title |
The Impact of Climate Change on Catastrophe Risk Model : Implications for Catastrophe Risk Markets in Developing Countries |
title_short |
The Impact of Climate Change on Catastrophe Risk Model : Implications for Catastrophe Risk Markets in Developing Countries |
title_full |
The Impact of Climate Change on Catastrophe Risk Model : Implications for Catastrophe Risk Markets in Developing Countries |
title_fullStr |
The Impact of Climate Change on Catastrophe Risk Model : Implications for Catastrophe Risk Markets in Developing Countries |
title_full_unstemmed |
The Impact of Climate Change on Catastrophe Risk Model : Implications for Catastrophe Risk Markets in Developing Countries |
title_sort |
impact of climate change on catastrophe risk model : implications for catastrophe risk markets in developing countries |
publishDate |
2009 |
url |
https://hdl.handle.net/10986/4152 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090608163227 |
genre |
North Atlantic |
genre_facet |
North Atlantic |
op_relation |
Policy Research working paper no. WPS 4959 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090608163227 https://hdl.handle.net/10986/4152 |
op_rights |
CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank |
_version_ |
1810464492763480064 |