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 gene...
| Main Authors: | , |
|---|---|
| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
|
| Subjects: | |
| Online Access: | 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 http://hdl.handle.net/10986/4152 |
| id |
okr-10986-4152 |
|---|---|
| recordtype |
oai_dc |
| spelling |
okr-10986-41522021-04-23T14:02:15Z The Impact of Climate Change on Catastrophe Risk Model : Implications for Catastrophe Risk Markets in Developing Countries Seo, John Mahul, Olivier 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 NATURAL CATASTROPHE NATURAL DISASTERS NATURAL HAZARDS OCCURRENCE OF HURRICANES POLICY MAKERS PORTFOLIO PROBABILITY DISTRIBUTION PROBABILITY OF OCCURRENCE PROGRAMS PROPERTY INSURANCE RECONSTRUCTION REINSURANCE BROKER REINSURANCE CAPACITY REINSURANCE COMPANIES REINSURANCE CONTRACT REINSURANCE MARKETS REINSURANCE PREMIUMS REINSURER REINSURERS RISK ASSESSMENT RISK INSURANCE RISK MANAGEMENT RISK TRANSFER SEA SURFACE TEMPERATURE SECURITIES STORM STORMS TERRORISTS TRANSACTION COSTS TROPICAL CYCLONE TROPICAL CYCLONES UTILITY FUNCTIONS 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. 2012-03-19T19:10:52Z 2012-03-19T19:10:52Z 2009-06-01 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 http://hdl.handle.net/10986/4152 English Policy Research working paper ; no. WPS 4959 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| 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 NATURAL CATASTROPHE NATURAL DISASTERS NATURAL HAZARDS OCCURRENCE OF HURRICANES POLICY MAKERS PORTFOLIO PROBABILITY DISTRIBUTION PROBABILITY OF OCCURRENCE PROGRAMS PROPERTY INSURANCE RECONSTRUCTION REINSURANCE BROKER REINSURANCE CAPACITY REINSURANCE COMPANIES REINSURANCE CONTRACT REINSURANCE MARKETS REINSURANCE PREMIUMS REINSURER REINSURERS RISK ASSESSMENT RISK INSURANCE RISK MANAGEMENT RISK TRANSFER SEA SURFACE TEMPERATURE SECURITIES STORM STORMS TERRORISTS TRANSACTION COSTS TROPICAL CYCLONE TROPICAL CYCLONES UTILITY FUNCTIONS |
| 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 NATURAL CATASTROPHE NATURAL DISASTERS NATURAL HAZARDS OCCURRENCE OF HURRICANES POLICY MAKERS PORTFOLIO PROBABILITY DISTRIBUTION PROBABILITY OF OCCURRENCE PROGRAMS PROPERTY INSURANCE RECONSTRUCTION REINSURANCE BROKER REINSURANCE CAPACITY REINSURANCE COMPANIES REINSURANCE CONTRACT REINSURANCE MARKETS REINSURANCE PREMIUMS REINSURER REINSURERS RISK ASSESSMENT RISK INSURANCE RISK MANAGEMENT RISK TRANSFER SEA SURFACE TEMPERATURE SECURITIES STORM STORMS TERRORISTS TRANSACTION COSTS TROPICAL CYCLONE TROPICAL CYCLONES UTILITY FUNCTIONS Seo, John Mahul, Olivier The Impact of Climate Change on Catastrophe Risk Model : Implications for Catastrophe Risk Markets in Developing Countries |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 4959 |
| 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. |
| format |
Publications & Research :: Policy Research Working Paper |
| 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 |
2012 |
| url |
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 http://hdl.handle.net/10986/4152 |
| _version_ |
1764390166675324928 |