Recognizing the evolving risks posed by tropical cyclones, Gallagher Re has partnered with Colorado State University (CSU) to study trends in these natural disasters, addressing challenges in the reinsurance industry and beyond, while advancing mitigation, adaptation, and resilience.
This partnership marks CSU as the first academic institution to join Gallagher Re’s new Tropical Cyclone Consortium. Established within the Gallagher Research Centre, the global multi-year consortium will conduct research on various tropical cyclone-related hazards, including wind and water impacts, and the potential effects on property. The consortium will also explore the role of the built environment in future loss trends.
According to Gallagher Re, CSU's research will focus on tropical cyclone activity related to rapid intensification and the impact of recurring climate patterns such as El Niño Southern Oscillation (ENSO). Additionally, it will examine the future implications of climate change on cyclone activity.
Since 2000, tropical cyclones have resulted in $2.17 trillion in economic losses and $710 billion in global insured losses. The United States mainland has accounted for 52% ($1.12 trillion) and 73% ($515 billion) of these totals.
Factors such as rising sea levels, coastal population growth, and increasing urbanization amplify the potential for cyclone damage. Consequently, insurers face challenges in accurately assessing and pricing tropical cyclone risk and addressing the protection gap of uncovered economic costs.
The CSU research and future consortium findings aim to improve tropical cyclone projections and loss modeling, helping the reinsurance industry better understand and prepare for these risks.
Phil Klotzbach, senior research scientist at CSU, stated that partnering with Gallagher Re will enhance understanding of historical and projected trends in tropical cyclone activity.
“Hurricanes are a large driver of both economic and insured losses, and consequently improving our knowledge of this natural hazard will help us prepare for an uncertain future. This research is even more critical as we embark on what is likely to be a very busy 2024 Atlantic hurricane season,” he said.
Steve Bowen (pictured above), chief science officer at Gallagher Re, noted the increasing financial and human costs from tropical cyclones.
“By recognizing the evolving nature of tropical cyclone behavior in conjunction with other socioeconomic factors, we must implement the latest scientific research into our decision making with near and long-term risk in mind. The insurance industry must take a leading role in communicating localized hazard risks to a global audience. Such a responsibility also requires a collaborative approach with various public and private sector entities. We are thrilled to partner with Colorado State University, which is home to world-renowned researchers in the atmospheric and ocean science space,” Bowen said.
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