Recognizing the changing landscape of tropical cyclone risk, Gallagher Re has partnered with Colorado State University to study the trends of this costly and important natural disaster peril, aiming to address challenges faced within the (re)insurance industry and beyond, while further advancing topics involving mitigation, adaptation and resilience.
The agreement also marks Colorado State University as the first academic entity to join Gallagher Re’s new Tropical Cyclone Consortium. Established within the Gallagher Research Centre, the multi-year global consortium of partners will produce new research on a range of tropical cyclone-based hazards (wind and water related) and the potential impacts to property. Additionally, the consortium will examine the key role the built environment plays in future loss trends.
CSU will focus on tropical cyclone activity related to rapid intensification and the impact of recurring climate patterns such as El Niño Southern Oscillation (ENSO) on tropical cyclone activity, in addition to the forward-looking role of climate change.
Since 2000, tropical cyclones have caused $2.17 trillion in economic losses and $710 billion in global insured losses. The United States mainland alone has accounted for 52% ($1.12 trillion) and 73% ($515 billion) of those totals1. Further amplifying the potential for damage from tropical cyclones today are rising sea levels, coastal population growth and an increasing urbanized footprint. As a result, insurers are challenged with accurately assessing and pricing tropical cyclone risk, as well as the growing protection gap of economic costs not covered by insurance.
The outcomes from the CSU research and future consortium output will seek to address these challenges and improve tropical cyclone projections and loss modelling to help the (re)insurance industry better understand and prepare for the peril’s growing risk.
“We are excited to partner with Gallagher Re to better understand both historical trends in tropical cyclone activity as well as projected future trends. Hurricanes are a large driver of both economic and insured losses, and consequently improving our knowledge of this natural hazard will help us prepare for an uncertain future. This research is even more critical as we embark on what is likely to be a very busy 2024 Atlantic hurricane season,” said Phil Klotzbach, senior research scientist at Colorado State University.
Said Steve Bowen, Chief Science Officer, Gallagher Re: “As the financial and human costs continue to accelerate from the tropical cyclone peril, it has never been more imperative to advance the science and understanding of how these events are behaving. By recognizing the evolving nature of tropical cyclone behavior in conjunction with other socioeconomic factors, we must implement the latest scientific research into our decision making with near and long-term risk in mind. The insurance industry must take a leading role in communicating localized hazard risks to a global audience. Such a responsibility also requires a collaborative approach with various public and private sector entities. We are thrilled to partner with Colorado State University, which is home to world-renowned researchers in the atmospheric and ocean science space.”