Historically, landfalling hurricanes in the US are the costliest of all natural hazards - the total bill for Hurricanes Katrina, Wilma and Rita in 2005, for example, was well over $80bn.
Even more powerful hurricanes have the potential to cause even greater damage than that of 2005 - a repeat of the devastating Category 4 hurricane that struck Miami in 1926 could cost in excess of $150bn today.
Hurricanes and Long-term Climate Variability, a report from Lloyd’s and the Met Office, examines the latest research papers from a number of leading organisations, including the Met Office and its US equivalent, the National Oceanic and Atmospheric Administration (NOAA).
The study explores how atmospheric climate and oceanic conditions influence the formation of powerful storms and what drives them to make landfall.
Thirst for knowledge
In recent years, organisations such as the Met Office have made great strides in their efforts to understand the global climate and provide medium and long range forecasts for the most destructive storms, like North Atlantic hurricanes.
This study presents the very latest knowledge on what drives changes in hurricane landfalling risks by examing the underlying physical causes. This approach takes steps towards the validation of some commonly used statistical relationships and will potentially find others.
“This study adds to the existing body of research on hurricane risk,” says Neil Smith, Manager, Emerging Risks, Lloyd’s. “It should help support and improve insurers’ understanding of the risk, and play an important role in helping them manage their exposures and mitigate their potential losses,” he says.
The severity and frequency of hurricanes is affected by a number of factors, in particular the long-term variability of the Atlantic atmospheric climate and sea surface temperatures, as well as external factors, such as man-made aerosols and volcanic eruptions.
To date, the insurance industry has mainly focussed on sea surface temperature when modelling hurricane risk, but they should also consider atmospheric and remote influences, says Matt Huddleston, Principal Consultant at the Met Office.
“This research will allow participants in the market to understand different views from the market norm, which should make for a more robust and diverse industry which is overall less exposed to hurricane risk” he says.
Understanding new phenomena
As understanding grows, the phenomena highlighted in the study are likely to feature more in the models used by insurers and scientists to predict hurricane activity and their potential impact, says Leon Hermanson, Senior Research Scientist at the Met Office.
One area of scientific research highlighted in the report that is of particular relevance to insurers is that of Atlantic Meridional Mode (AMM), which affects the development of some of the most damaging hurricanes, says Hermanson.
AMM is a climate pattern that includes both the ocean and the atmosphere variability, and is probably initiated and strengthened by external factors, including African dust outbreaks and changes in sulphate aerosol in the atmosphere.
“Insurers are already familiar with phenomena like El Nino and the Atlantic Multi-decadal Oscillation. But the AMM is another important phenomenon, that, if successfully predicted, could help predict some of the biggest and most damaging North Atlantic hurricanes,” he says.
A less well known phenomenon that also appears to effect hurricane risk is the Atlantic Warm Pool (AWP). The AWP - characterised by relatively warm sea surface temperatures across the Caribbean and the tropical Atlantic - is known to be linked to the shape of hurricanes and how they track, but while there have been interesting findings, it is still a relatively new area of science, says Hermanson.
“The AWP is an important part of tropical Atlantic climate variability that can both influence where hurricanes originate and the overall activity in a season. However, the relationship between AMM and AWP is still unclear,” he says.
Isolating phenomena like the AMM and AWP helps scientists examine their influence on the biggest risks. “This should eventually lead to more accuracy in forecasting as these conditions are explored and incorporated into models,” says Hermanson.
Work in progress
“There is still a considerable amount of uncertainty in the science linking hurricanes and climatic and oceanic phenomena but scientific understanding is growing quickly,” says Huddleston.
“It is an exciting time to be a climatologist,” says Huddleston. “There is a lot of interest in Atlantic hurricane and North West Pacific storms, partly driven by insurers’ exposures, but also because it is a new and growing area of scientific understanding,” he says.
“There has been a huge increase in computing power which means that global weather models can be used for longer time frames and can include phenomena like the AMO and AMM,” he says.
Business and Science working together
“This is not the first time Lloyd’s and the Met Office have worked together to produce scientific research for insurers,” says Smith. “The two organisations have a strong relationship,” he says.
Last year Lloyd’s worked with the Met Office to produce a report on the value of long range forecasting for insurers.
Met Office scientists have also been recognised by Lloyd’s Science of Risk Prize, now in its third year. The prize, which is now open to 2012 entries, awards the best scientific research in areas of relevance to insurers, including climate change and natural hazards.
Met Office researcher Doug Smith won the inaugural Science of Risk Prize in 2010 for his paper on long range hurricane forecasting, while Adam Scaife won the Climate Change category in 2011.