4 September 2013 Insurance

Climate change means flooding is a growing risk

Flooding caused by rising sea levels linked to climate change will become a significant threat to society in the future causing great challenges around risk management, according to a report by Guy Carpenter which an analyses the evolving risk landscape spurred by global warming.

Climate change, global warming and the resulting landscape shift for risk management is a growing area of concern among governments, the general public, the private sector and the (re)insurance industry at large, the report said.

Critically, the report also attempts to dispel any doubts around the existence of climate change. According to the report, global warming is an established scientific fact that cannot be explained by natural variability alone.

“The debate on climate change and global warming has been intensely polarized. A great deal of this ‘noise’ has clouded the very real and emerging issues that we as an industry and society need to address,” said Johnny Chan, PhD, Director of the Guy Carpenter Asia-Pacific Climate Impact Centre.

“In order to adapt to climate change and the changing risk landscape, it is necessary to cut through this noise and focus on objective decisions to mitigate both the financial and social risks associated with climate change.”

According to the Intergovernmental Panel on Climate Change (IPCC), a scientific body that reviews and assesses scientific evidence pertaining to the physics and impacts of climate change, the evidence of global warming is undeniable and includes: increasing air temperatures, increasing ocean water temperatures, tree ring characteristics, ice core characteristics and the retreat of ice caps.

“Based on consistent and mounting scientific evidence, the IPCC has assessed that it is highly unlikely that recent warming trends can be explained away by natural variability alone,” said James Waller, PhD, Research Meteorologist for GC Analytics.

“Estimates show that the mean temperature of the Earth could rise an additional two to four degrees Celsius by the end of the century. This may seem like a relatively small increase, but the impact of rising temperatures, even by a few degrees, could cause a shift in weather patterns, with considerable impacts worldwide.”

Based on this evidence, the report concluded that the single greatest threat posed by global warming is the rise in sea levels, which are expected to increase coastal flood frequency and severity from tropical cyclones, extratropical cyclones and tsunami events.

According to the IPCC, a sea-level rise of at least one to two feet can be expected by the end of the century, though a wide range of sea-level rise scenarios exist. The growing urban footprint and increasing population density in coastal areas has also amplified the financial and societal impacts of such events.

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