Abstract

Weather risks are changing faster in North America than anywhere else in the world. Three components contribute to this risk: hazard, exposure (or values at risk) and vulnerability. While hazards are inherently natural, humans determine where values are placed and how they are protected. Results of the data and scenarios analyzed show that, due to socio-economic factors such as ongoing urbanization and increasing values, the potential for weather-related losses in North America is still rising. In addition, new technologies may give rise to new risks. Natural hazard insurance will therefore remain a challenge, with climate change bringing further uncertainty.

Weather risks resulting from different kinds of windstorms are presented from the viewpoint of a leading reinsurer. Tropical cyclones (hurricanes) are certainly the most devastating weather events in the USA, but a strong upward trend in losses in recent years has made severe thunderstorms almost equally damaging as regards annual aggregated losses; this hazard will also most likely increase further as the climate changes. Extratropical cyclones with significant loss potential can occur year-round; the types of hazard they produce vary greatly by region. Global warming intensifies the risk of severe weather and will result in higher natural peril losses.

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