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Hurricanes : economic loss on the rise since 1990

by

Justine Montminy

13 September 2018 13:30

Photo : Nasa

The economic losses caused by hurricanes are rising along the coasts of the Atlantic and Gulf since 1990, causing an increase of insured losses. This is what brings the firm’s rating DBRS, as hurricane Florence is about to hit South Carolina and North Carolina in the United States.

The increase in economic losses is caused by the increase of population in areas at risk of hurricanes. For example, Florida has experienced a population increase of 165 % between 1970 and 2010, reports the National Oceanic and Atmospheric Administration (NOAA).

Affordability of insurance, a problem in becoming

The increase of the economic losses caused by the hurricanes is likely to increase the cost of private insurance policies and long-term public, reports to DBRS. The accessibility to insurance could be problematic for some, hence the importance of the federal programs of insurance against floods, such as the National Flood Insurance Program.

“The National Flood Insurance Program should continue to be the main source, probably the only source for some places, insurance coverage against flooding in flood-prone areas, but the demand for hedge by the private sector will increase as the losses will continue to increase,” the report explains.

In the United States, the number of policies issued by the National Flood Insurance Program has increased from 1.45 million in 1978 to 5.08 million in 2016.

Hurricanes stronger

The report from DBRS also indicates that hurricanes are becoming stronger since the last 30 years, causing more damage. According to the National Hurricane Center, the last 20 years have seen many hurricanes that have caused more than $ 1 billion of u.s. dollar (US$ billion) in damages. From 1998 to 2017, there have been 27 hurricanes of category 3 and above, compared with 16 during the previous 20 years.

The scientists attribute this increase in strength with global warming, since the temperature of the water has a direct impact on the strength of a hurricane. Analysts with DBRS to believe that the devastation caused by the hurricanes will continue to rise.

“It is expected that the economic damage and insured losses caused by hurricanes in the Atlantic region are increasing. The intensity and severity of these large tropical systems seem to increase with water temperatures warmer, and a rise in the level of the water caused by the warming of the planet. “

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