In an interview with CNBC, the Chief Financial Officer (CFO) of global reinsurance giant Swiss Re, John Dacey, explained that the firm believes the series of catastrophe events that occurred in the second-half of 2017 are not a one-in-100 year event, but more a one-in-10 year event.
After 12 years without a major (Category 3 or higher) hurricane making landfall in the U.S., the second-half of 2017 saw the occurrence of three major landfalling storms, in hurricanes Harvey, Irma, and Maria.
Various reports and findings from insurance and reinsurance industry participants have noted an increase in both the severity and frequency of natural catastrophe events across the world, a trend that some believe is going to intensify as a result of climate change and the subsequent warming of both the earth and oceans.
Speaking with CNBC, Dacey underlined that climate change is warming our seas as well as the planet, adding that “one of the reasons why the expectation of future hurricanes is so high is that last year’s three hurricanes together – the $135 billion of losses – are a one in 10 year event not a one in a 100 year event.
“We see the possibility for a repetition of these kinds of losses in the foreseeable future.”
The reinsurer’s Chief Executive Officer (CEO), Christian Mumenthaler, also noted the impacts of climate change during the firm’s H1 2018 media call, stressing that in the view of Swiss Re, the recent droughts and wildfires in Europe, as well as the wildfires in California, is “strongly linked to climate change.”
He noted that while in Europe the amount of losses from fires are quite limited when compared to natural catastrophes, last year was still a record year for wildfire losses, as a result of California.
The trend is “increasing and it’s worrying,” warned Mumenthaler, although he did add that for Swiss Re, these are not events that particularly have an impact, rather that “they are human tragedies.”
While the impacts of climate change remain heavily debated across many industries, it’s clear that Swiss Re feels the changing, warming climate is driving heavy drought conditions in some parts of the world and intense and devastating wildfires. At the same time, the reinsurer feels the occurrence of multiple, large storms, as seen in Q3 2017, is a more common occurrence than some believe.
