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Member, Beacon International Group, Ltd.
LONDON--Financial losses from weather-related catastrophes have increased by an average of 2% per year since the 1970s, according to the chief researcher of catastrophe modeler Risk Management Solutions Inc.
The rate of loss increase holds true even when inflation, changes in wealth and population growth are taken into account, said Robert Muir-Wood, chief research officer of Newark, Calif.-based RMS.
Mr. Muir-Wood offered his assessment of climate change's impact in a statement issued shortly before the Intergovernmental Panel on Climate Change issued its report in Brussels on Friday.
"It is clear that weather-related hazards are already increasing in some regions of the world due to climate change, and as a result, financial losses from extreme weather catastrophes, such as floods, droughts, heat waves and storms, are also increasing," said Mr. Muir-Wood. "The increases in extreme weather have placed our current systems for risk management, such as insurance, under stress," he said.
"We can expect more situations like the flooding of New Orleans, where current infrastructure is inadequate to protect populations," he said. "In areas of rising risk, governments will be placed under increasing pressure to provide state-backed alternatives to private insurance, as has already been happening in Florida."Meanwhile, the IPCC report projects that climate change will result in increased flooding in coastal areas as sea levels rise. In addition, the report predicts that there will be "an extended period of high fire risk" in parts of North America that are already prone to forest fire, with larger areas of forest being burned.
The report also predicts that North American cities "that currently experience heat waves are expected to be further challenged by an increased number, intensity and duration of heat waves during the course of the century, with potential for adverse health impacts."