A new report from the Massachusetts Institute of Technology (MIT) and Princeton University claims that so called “100-year Storms” could happen as frequently as every 3 to 20 years. 100-year storms are natural disasters of massive strength that leave a great deal of destruction in their wake. Risk modeling firms were the first to popularize these terms to express the potential risks that insurance organizations had to prepare to mitigate. Insurers use the risk assessments provided by modeling firms to price coverage, but this new report could change everything.
Researchers claim that these monumental storms could become more frequent as a result of climate change. For the report, researchers simulated tens of thousands of storms that were influenced by the effects of climate change and found that these storms would be occurring more regularly and, in some cases, would be much more devastating. Researchers claim that the effects of climate change will have an impact on every industry of business, but will especially influence insurance, agriculture and construction.
The report notes that current climate conditions are not quite at the point where strong storms are inevitable, but that may be the case within the next decade. Last year, major storms caused more than $300 billion in damages for the global insurance industry. If storms do get worse and become more frequent, the financial damage would be much more severe.