Underwriting requires confidence that models somewhat accurately reflect risks, which climate change is amplifying in scary, unknown ways. Climate change is another challenge: Using data going back to the 1960s, when the climate was cooler, will lead to underestimates of rainfall. Seasonal patterns that climate models have struggled to forecast, such as the oscillation between wet El Niño and dry La Niña seasons, may become clearer. The rising cost of disasters is more about population increases in hazardous areas than climate change itself. Inigo’s research suggests that demographic shifts have caused more than a doubling in expected annual losses since 1970, compared with a 25% increase from climate change.

Source: Wall Street Journal October 30, 2023 20:04 UTC