Gallagher Re has announced a partnership with Colorado State University (CSU) to study trends in tropical cyclone risk, aiming to address challenges within the (re)insurance industry and beyond.
This collaboration is also set to advance topics involving mitigation, adaptation, and resilience.
This agreement marks CSU as the first academic entity to join Gallagher Re’s new Tropical Cyclone Consortium. Established within the Gallagher Research Centre, this multi-year global consortium of partners will produce new research on a range of tropical cyclone-based hazards, including wind and water-related impacts on property.
The consortium will also examine the role of the built environment in future loss trends.
As part of the partnership, CSU will focus on tropical cyclone activity related to rapid intensification and the impact of recurring climate patterns such as El Niño Southern Oscillation (ENSO) on tropical cyclone activity, as well as the forward-looking role of climate change.
Since 2000, tropical cyclones have caused $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 those totals. Rising sea levels, coastal population growth, and an increasing urban footprint amplify the potential for damage from tropical cyclones.
As a result, insurers face challenges in accurately assessing and pricing tropical cyclone risk and addressing the growing protection gap of economic costs not covered by insurance.
The outcomes from CSU research and future consortium work will aim to address these challenges and improve tropical cyclone projections and loss modeling to help the (re)insurance industry better understand and prepare for the increasing risk.
Phil Klotzbach, senior research scientist at Colorado State University, welcomed the partnership amid the issues being caused by more extreme weather events.
“We are excited to partner with Gallagher Re to better understand both historical trends in tropical cyclone activity as well as projected future trends. 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,” Klotzbach said.
“As the financial and human costs continue to accelerate from the tropical cyclone peril, it has never been more imperative to advance the science and understanding of how these events are behaving. 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,” Gallagher Re chief science officer Steve Bowen said.
“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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