WEATHER & CLIMATEVOLATILITY OR CHANGE IN THE AIR?MAY 21, 2019
Joshua Darr, MS CCRA
Chicago
Senior Vice President & Meteorologist
IMUA Annual Meeting, Lansdowne Resort, Leesburg VA
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Volatility or Change in the Air?Agenda
1
What are the latest scientific views on changing weather patterns?
How does the changing weather patterns impact the frequency and severity of North American catastrophe events?
What lessons have been learned? What can we do about the future?
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Weather VolatilityWhy is it Important to Stay in Tune with the Latest Science?
2
Source: 2018 World Economic Forum Global Risks Report
Increasing acknowledgement by many policy groups that we are witnessing an
increase in cat events and extreme weather globally
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Global Insured Catastrophe Losses1970 - 2018
3
Source: Guy Carpenter, Swiss Re, includes NFIP insured losses
4
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air? 5
Global Temperatures Since 1980Natural Cycles being Disrupted? The Disputed Pause of the 2000s
Source: NASA GISS
Baseline temperatures: 1951-1980
Year
Glo
bal
Te
mp
era
ture
An
om
aly
Global Ocean-Land Surface Temperature (C)
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
1
1.2
Annual Mean 5 Year Running Average
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
The 2016 Mega El NiñoRecord Intensity
6
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
El Niño Events Naturally Warm the GlobeWarmth Released from Ocean to Atmosphere
7
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Comparing Most Recent Mega El Niño Events
8
Meaningful Shift in Region of most Prominent Warming
El Niño events
tend to propel
natural warming of
the globe
Most of the mega
2016
El Niño warming
was focused in the
Arctic
Winter
temperatures were
8-15C (15-28F)
warmer than
average
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
The Acceleration of Arctic Sea Ice LossOutsized Impact on Temperatures as Ice Shifts to Open Waters
• Impact on arctic temperatures due to more ocean
9
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Less Ice = Dramatic Warming Across the Arctic
10
Autumn Arctic Temperatures since 1950
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air? 11
The Jet StreamMeasuring the Strength of Temperature Contrast
NASA
Video link
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Tale of Two Springs!Comparing April 2017 to April 2018
12
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air? 13
Current Climate Change UnderstandingStacking Weather Perils Side by Side
• Is there a way to link a
changing climate to any
individual catastrophe peril
event?
• Science evolving rapidly in
this field
• Highest confidence in link to
precipitation events
• Least confidence in
thunderstorm and winter
events
2014 National Academy of SciencesClimate Change: Evidence & Causes
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Extreme Rainfall EventsA Double Whammy: More Frequent and Severe
15
Extreme One-Day Precipitation Events in the Contiguous 48 States (NOAA)
Change in amount of precipitation falling in heaviest 1% of all daily events
(NCDC / Climate Central)
2016 featured 19 separate floods the US, the most since records began in 18802017 continued the deluge with Hurricane Harvey in Houston; 2018 brought Lane to Hawaii, Florence to Carolinas, record setting Mid-Atlantic2019 off to fast start with record floods in Nebraska and Iowa
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Atmospheric RiversThe Moisture Freeway from the Tropics to Mid-latitudes
16
As the atmosphere warms, the ability to transport higher amounts of moisture from the
tropics to the mid-latitudes increases roughly 7% for 1 degree C.
• Narrow, moisture laden corridors in the atmosphere
• A ‘freeway’ of moisture rich air that connects the tropics to the mid-latitudes
• Advances in satellite technology over the past 20 years have brought AR detection from research to operations
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Major Increase in Crippling US Snowstorms in Recent YearsCounterintuitive to Warming Climate? Not Expected 20 Years Ago.
17
0
2
4
6
8
10
12
14
1940 1960 1980 2000 2020
Northeast Snow Impact Scale
11
6
6
5
7
27
0 10 20 30
1959-1968
1969-1978
1979-1988
1989-1998
1999-2008
2009-2018
NESIS Events by Decade
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
The March and April 2019 “Superbombs”Frequency and Severity due to Persistent Jet Steam Patterns
18
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Massive Snowpack Melt & Heavy Rain Unprecedented Flooding
19
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Winds in Excess of 100 mph Gusts26 Car Trail Derailment in New Mexico
20
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?21
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Wildfire: Are we Witnessing a New Normal?Record Setting Loss Years of 2017 & 2018
21
- 5,000 10,000 15,000 20,000
Insu
red
Lo
ss
# Structure Damaged/Destroyed
California Wildfires Loss vs. Structures Damaged/Destroyed
Tubbs
2017
Atlas
2017 Oakland
Hills 1991
Thomas
2017
Carr
2018
Camp
2018
Woolsey
2018
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Wildfire: Plethora of Factors at PlayShorter Wet Season across Western U.S.
22
1) Later onset, earlier end to winter wet season
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Wildfire: Plethora of Factors at PlayAnomalous Heat in Recent Years
23
2) Earlier onset of spring heat, persisting through summer
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
JanFebMarApr
MayJunJul
AugSepOctNovDec
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Timeline of a DisasterPrior Conditions, Forest Health & Management
24
129 million dead trees in Sierra Nevada
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Timeline of a DisasterMeaningful Increase in Tree Mortality
25
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Wildfire: Plethora of Factors at PlayA Wet Winter is not Necessarily a Good Thing
26
Source: NOAA, Jan 2017 precip anomaly
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
What lessons have we learned? What can we do about the future?
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Increasing Company StrengthLeveraging Analytics to Make Objective Assessment
28
Outsized loss to expectations
Risk differentiation
Risk mitigation & InsurtechLeveraging cat experience to
propel financial stability via analytical solutions
Efficient claims response
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Early Entry to Insurtech WorldCommercial Catastrophe Models
29
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Risk DifferentiationObjective Analytics Driven by Insurtech Solutions
30
In addition to all exposure and cat model solutions, a host of companies and
insurance providers can provide hazard risk scores for a whole host of perils
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Outsized Loss to ExpectationsExtreme Power Outages more Prevalent
31
Million customer-hours impacted; largest blackouts in US history
483
515
568
592
681
683
700
753
775
850
1,050
3,228
- 500 1,000 1,500 2,000 2,500 3,000 3,500
Irene (2011)
Wilma (2005)
Florence (2018)
Northeast Blackout (2003)
Katrina (2005)
Ike (2008)
Hugo (1989)
Irma (2017)
Sandy (2012)
Michael (2018)
Georges (1998)
Maria (2017)
Millions of hours of customer power outages
US Total 2012-2016
3,400M hours
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Better Technology to Manage Supply Chain RiskRiskpulse Sunrise Platform
32
Transportation and logistics suffer greatly due to poorly managed supply and demand risks which lead to lost sales, broken promises to customers, damaged
products and excessive freight costs
© 2019 Guy Carpenter & Company, LLC Weather & Climate: Volatility or Change in the Air?
Man made or natural climate variability?
Weather & Climate PatternsIncreasing Volatility or Fundamental Changes?
33
Is the weather getting worse?
• No. However, it’s getting more
volatile
Why is weather getting more volatile?
• Warmer Arctic as well as mid-latitudes
linked to stickier weather patterns, causing
longer regimes with embedded extremes
Can we say anything about the future?
• Arctic ice loss expected to continue, no
sign of going back to historical normals
What can be done to manage the volatility?
• Insurance protection, real time monitoring
& catastrophe modeling, resiliency efforts 0
5
10
15
20
25
30
35
40
45
50
1910
1920
19
30
1940
1950
1960
1970
1980
1990
2000
20
10
% L
ow
er
48 U
nd
er
Extr
em
e C
on
dit
ion
s
US Climate Extremes Index
CEI 5 per. Mov. Avg. (CEI)