Press Release: Northward migration of tropical cyclones may pose increased risk to heavily populated areas in the Northwest Pacific

Studies show potential for increased risk which may require a new approach from the market

According to a new report from global specialty (re)insurance group Chaucer, evidence from a number of academic studies suggests the area in which Pacific typhoons reach their lifetime maximum intensity is gradually moving northwards.

The current trend is for the area of maximum intensity of these typhoons to move roughly 0.5 degrees latitude north per decade (see report attached), which equates to an approximately 56km northward shift and over time this could lead to increased risk in coastal areas.

“There is no clear consensus on the mechanism causing the poleward shift, but the data shows compelling evidence that it is happening. While the impacts remain uncertain, we believe in being proactive and have stress tested what the trend could imply for our reinsurance portfolio.” Says Heinrich Beukes, Research Manager.

Academic studies also suggest that this long-term trend could be influenced by climate change and requires further research.

Adapting models to reflect the growing risk to property and life created by climate change is essential to (re)insurers.

Chaucer has developed its approach to incorporate the northward movement of typhoons into its View of Risk. The risk model now shows potential for greater expected risk of losses in the next ten years.

Says Chris Wright, Head of International Property Reinsurance:

“We engage with our business partners candidly and collaboratively; this latest update is by no means our final work on the region, but a work in progress as we assess academic and real-world data to bridge to the next step.

Climate change is not the only aspect of risk reviewed, but it is the focus of this update. As more data is reliably analysed and produced, we envisage further updates of this version. As vendor models adapt, we will review those changes and seek to adjust and incorporate our own view of risk.

We hope this update prompts open dialogue with our esteemed long-term partners.”

Chaucer is taking a similar approach to other perils typically related to typhoons, increasing its research and adjusting its modelling in areas including:

• Increased rainfall induced flooding
• Storm surge (higher seas)
• Increased intensity of typhoons
• Westward migration of typhoons in the northwest Pacific