2014: The warmest year since systematic temperature records began
According to data from the US weather service NOAA (National Oceanic and Atmospheric Administration) published in mid-January 2015, this past year of 2014 was the warmest ever in the time series that has been measured since 1880. The global mean temperature for land and sea surfaces was 0.69°C above the comparison value in the 20th century. The Earth has warmed in particular over the last few decades. According to assessments made by the Intergovernmental Panel on Climate Change (IPCC), a further rise in temperature will exacerbate the hazard situation in many regions.
Particular warming over the last 35 years:
Even restrictive programmes to reduce greenhouse gases will only have an effect in the medium term:
To be clear: A hurricane itself cannot be attributed simply to a changing climate, but its consequence could be reinforced, for example through higher sea levels. Insurers have to recognise and take into account these changing risks. And differentiate them cautiously depending on many factors like the current climate phase, season and region, as the extent of the sea level rise differs globally from region to region. Data and know-how should be part of a constant improvement of risk assessment and model building. In the mid-to-long term, as a result of the increased warmth and the increasing absorptive capacity of moisture in the atmosphere that comes with it, the frequency and intensity of extreme weather events like storms and heavy rainfall, with variations from one region to another, can be expected to rise. The Intergovernmental Panel on Climate Change (IPCC) confirms this in its 5th assessment report on the state of knowledge on climate research, published in 2014. The IPCC also expects weather extremes to swing in the other direction in many regions, bringing heatwaves and droughts. The trend towards an increasing number of weather-related catastrophes has been apparent for some years in the Munich Re NatCatService database.
Even stringent programmes to reduce greenhouse gases in the atmosphere will not stop anthropogenic climate change in the medium term. That is because carbon dioxide and other greenhouse gases remain in the atmosphere for more than one hundred years. Extensive programmes to reduce greenhouse gas emissions worldwide are needed in the next few years if we are to slow the trend towards further warming and its consequences in the second half of this century. Under the auspices of the United Nations, it is hoped that such a global agreement can be reached at the 21st Global Climate Conference in December 2015. The political objective is to limit warming of the Earth's atmosphere to two degrees Celsius compared to the pre-industrial average temperature. Climate expert Ernst Rauch from Munich Re is convinced that the outcome from the UN Climate Conference in December 2014 in Lima is insufficient to achieve this goal, particularly as most of the decisions were postponed to the upcoming climate conference in Paris at the end of 2015. Rauch: "With any further delay in implementing effective measures comes the danger that the risks from weather extremes will increase further and lead to events on a regional level that have never been witnessed before." For the insurance industry, this development means that risks need to be constantly reviewed. If the international community fails to agree on relevant reductions in CO2 emissions during the 21st Climate Conference this year in Paris, even more radical adaptation measures will be needed in the coming years and decades than was previously the case in order to adjust to the consequences of already changing weather patterns. After Lima, it is hardly realistic to expect that there are now any alternatives to this scenario. Extreme precipitation, droughts and storm surges will become more likely in many regions.
In view of this, all public and private organisations exposed to risks from these natural phenomena need to start considering appropriate adaptation measures immediately. In the private sector this applies in particular for the insurance industry, whose business model includes the identification, assessment and acceptance of risks due to natural disasters. For decades now, the insurance industry has accumulated knowledge from these functions about the vulnerability of societies and physical property to severe weather and geophysical catastrophes. The insurance industry also contributes to improving resilience. In the US, the Institute of Business and Home Safety (IBHS), founded and financed by the insurance industry, explores in quite practical ways how buildings can be improved to withstand natural disasters. Often, expensive solutions are not needed to take a significant step forward towards more resilient buildings. Also, knowledge gained from past cases of severe damage is used to obtain a broad and in-depth picture of how natural catastrophes impact infrastructure and buildings. In the foreseeable adjustment processes, the insurance industry will also have to accept responsibility for the transfer of this knowledge to political and social decision-makers and also for the development of innovative (financial) risk transfer solutions for countries of all income groups.