The increasing importance of long-term forecasting for insurance and reinsurance firms is outlined in a joint Lloyd's and Met Office report published online this week. Written by Matt Huddleston, Principal Consultant at the Met Office, the report examines the issues that the changing climate poses for managing exposure to weather-related risk.
In 2010, about $27 billion of insured loss was recorded by firms around the world due to floods, storms, drought, and other extreme weather.*
Traditionally insurance and reinsurance companies have managed their exposure to this type of risk by basing decisions on records of past events. However, there is growing evidence that suggests changes in our climate are increasing the frequency of extreme weather events - and this may mean that past data is less reliable as the only guide to the future.>> More