Quantifying the Economic Risk of Hurricanes in the U.S. Under a Changing Climate

The East Coast of the U.S. is a key region for the U.S. economy. Hurricanes cause billions of dollars’ worth of property and infrastructure damage along that coastline each year. Climate change presents a major source of economic risk through potential changes in tropical cyclone intensity and frequency. In this work, we investigate the financial impacts of climate change by integrating late 21^st century ensemble projections for changes in hurricane frequency and intensity into the RMS North Atlantic Hurricane catastrophe model. Catastrophe models are widely used in the insurance and reinsurance sectors to quantify the cost of disasters. The models provide their users with a stochastic set of events that expands the scope of the historical catalogue by including synthetic events that are likely to happen in a defined time-frame. By combining information about the property exposure and response to each stochastic tropical cyclone event, the model can be used to predict economic losses along the coastline under a changing climate. We will describe the RMS north Atlantic hurricane model used and show how it has been adjusted to account for climate change projections defined by 6 different IPCC Coupled Model Intercomparison project (CMIP5 ) models. The projected changes in average annual loss in 6 different coastal regions will be presented and discussed.