Tropical cyclone risk could be increasing in the Northwest Pacific: Chaucer

According to global specialty insurance and reinsurance group Chaucer, evidence from observational data and climate models shows that tropical cyclones, known as typhoons in the Pacific, are showing signs of being influenced by climate change, with a notable trend of their peak intensity shifting northward in the Northwest Pacific.

In a new report, Chaucer explains that the current trend being seen is for the area of maximum intensity of these typhoons to move roughly 0.5 degrees latitude north per decade, which equates to an approximately 56km northward shift.

Any northward movement of tropical cyclones (TCs) in this region, along with projected TC intensity increases could mean increased risk, both to human mortality and impact to the re/insurance industry, Chaucer warns.

“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.

Chaucer also explains that a number of different academic studies suggest that this long-term trend could be influenced by climate change, however, the firm notes that this requires further research.

In addition, the specialty re/insurance group also revealed that it has developed its approach to incorporate the northward movement of typhoons into its View of Risk, through adjusting its licenced catastrophe model. The risk model reportedly shows potential for greater expected risk of losses in the next ten years.

Furthermore, Chaucer noted that it is taking a similar approach to other perils typically related to typhoons, as the company is increasing its research and adjusting its modelling in areas including: increased rainfall induced flooding, storm surge (higher seas), increased intensity of typhoons, and westward migration of typhoons in the northwest Pacific.

Chris Wright, Head of International Property Reinsurance, commented: “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.”