A science blog with Eric Berger

Scientists’ guess on hurricanes affects insurance


Have scientists inadvertently raised your insurance rates?

That’s the question I set about tackling today in a story about RMS, expert elicitations and five years of hurricane activity.

Three years ago at the behest of a risk management firm, a group of handpicked experts predicted that, between 2006 and 2010, 40 percent more major hurricanes would make landfall in the United States than the long-term average. That led the risk management firm RMS to raise its hurricane modeled losses for the next five years by 40 percent.

There haven’t been any major hurricane landfalls since then, and the most recent meeting of experts dropped their expectations, predicting that during the next five years 20 percent more major hurricanes would make landfall than normal. Will the modeled losses fall accordingly?

Perhaps not, RMS says.

Interestingly, the news release also says this about the scientific understanding of hurricane activity in a warming world:

There is now much greater consensus among hurricane scientists on the impact of increased global sea surface temperatures (SSTs) on Atlantic hurricane activity.

Let me tell you the scientists who participated in the “expert elicitation” were shocked by that statement. Here’s what Judith Curry, a Georgia Tech atmospheric scientist who believes climate change is making Atlantic hurricanes stronger, told me about that statement:

“Absolutely not. The understanding of sea surface temperature influence on hurricane activity is maturing quite a bit. But how could they conclude that from the diverse group of people at their gathering? It’s just an unwarranted conclusion from their elicitation process.”

If I had to guess, I’d say don’t hold your breath for RMS to drop their modeled losses, despite the results of last October’s elicitation. What goes up doesn’t necessarily come down.

Categories: Hurricanes
Eric Berger

10 Responses

  1. Sam Wells says:

    thanks for the posting Eric. Dr. Jeff Masters over at Wunderground has been wondering the same thing, noting that many of the predictive models perform poorly, or as he says in more scientific terms, “with less skill.”

    I forget where I saw it, but an emerging concept is that even if SSTs increase in “hurricane alley” it is the differential in temperatures, not the absolute that matters. Thus if average SSTs rose a degree or two, isolated ares might have to have a differential of several degree higher to form a large hurricane.

    I don’t think I’m saying it right but that’s the gist of it in my layman’s understanding. It makes sense, since if temperatures and pressures were totally uniform over hurricane alley, nothing would happen – it would just be a little hotter. -sam

  2. Marilynn says:

    … just like taxes, huh?

  3. Barkley says:

    There haven’t been any major hurricane landfalls since then . . .

    What was Ike? A thunderstorm?

  4. Eric Berger says:

    Ike was a Category 2 hurricane. A very large hurricane, but not strictly a major hurricane.

  5. Sam Wells says:

    I think they (the modelers and insurance companies) were expecting five times more than what Dolly, Fay, and Ike brought to the US mainland, but the damages weren’t all so bad as compared to the forecast. They made good money hand over fist.

    Many and I suppose most folks use windstorm policies such as the “insurance of the last resort” that is state sponsored. Here it is called the Texas Windstorm Association. We’re getting a raise in premiums and if we get a few more “average” hurricanes the fund could go dry.

    The real issue is that the private company insurance was 40% too high and the Texas Windstorm was 40% too low. Same model, different interpretation of the results. -sammie

  6. Dr. J says:

    Judith Curry said that??? I am shocked and amazed, she usually is the Algore and Jim Hansen of the doom and gloom merchants in the hurricane scare biz. Why is she now trying to act like an objective scientist (which she isn’t)? I smell something fishy here.

  7. Joe says:

    “Ike was a Category 2 hurricane. A very large hurricane, but not strictly a major hurricane.”

    Posted by: Eric Berger

    Maybe we need to redefine the categories then. Two friends of mine died in that hurricane when their house blew away and landed on another house 100 yards away. This unmajor hurricane left 5 million people in the dark for almost a month and killed hundreds, caused billions of dollars worth of destruction and future economic losses for years to come…not to mention the submersion of an entire American City. I call that major.

  8. The Mouth of the Yellow River Group says:

    Ni Hao! Kannichi Wa!Weather and hurricane prediction should not be classified as “science,” equivalent to physics, chemistry or physics and chemical based biology. For that matter neither should global climate change, particularly questions about man’s contribution. It is a social “science” at best which MOTYR Group considers a hijack of the term “science.”This example is another of the increasingly ones where pseudoscience is being used to validate sociopolitical, exploitive agendas that ends up as overall misleading, disastrous in the real world. Whether that be economic, tax or simply behaviorial policy, disastrous treatments in medicine when it comes to biological pseudosciences which are killing rather than healing.This problem and abuse in the name of “science” just like abuse in the name of “God” in past contexts is indeed a tragedy at this stage of human evolution. It is at the expense of fundamental basic knowledge and understanding that is so critical at this juncture.In respect to insurance and Gulf Coast hurricanes, the general principle is those who spend the most, follow the rules and modern codes for hurricane resistance, and thus pay the most in terms of investment, have the least damage, get the least payout, pay for those who invest the least in hurricane resistance, whose rates are the same, subvert hurricane resistant codes, have the most damage, get the most insurance over and over. Social welfare at its ultimate.MOTYR

  9. Sam Wells says:

    Not to quibble, MOTYRG, but more science goes into hurricanes that you would think, including several satellites, super-computers, and 3-D modeling of things such as hot towers and eyewall dynamics. What you’re saying is that unlike many sciences, the predictive ability to predict hurricane track is average (although ten times better than in the past) and that predicting hurricane intensity can be poor at times. So what? Pure science has screwed up enough times and the theoretical stuff in many cases doesn’t help people on single bit.

    Take the classes to become a certified meteorologist and hurricane expert. You’ll have to learn physics, computer programming, high math, and all kinds of science. Myself, I am just a “softy” applied environmental geographer with enough appreciation of my amateur enthusiasm for hurricanes that I happen to vehemently disagree.

  10. Joe says:

    “…have the most damage, get the most insurance over and over. Social welfare at its ultimate.”


    Really? In that case, I’ll let you pay for my flood insurance, since you consider it welfare. I take full responsibility for risks out of my pocket every year, knowing full well of the risks here in hurricane alley, and I won’t give it up for the reward of walking down the beach during a sunset in complete peace, pondering the reasons for life and happiness, and what I can contribute for the betterment of mankind. It is only in those fleeting moments that great thoughts dawn upon the simple man like myself, and spur a call to action with others of like mind, that can change the lives of those in need without personal reward. I see that over and again in my fellow beach dwellers here on the Gulf coast, as it has and always will be in our lifetimes as we know it. Case in point: Galveston was written off in 1900 by most. It was rebuilt out of sheer positive thinking and determination, thereby proving that the spirit, soul, and driving forces of mankind will not be diminished by a small setback in the grand scheme of cataclismic events such as a hurricane or a tornado or a flood or fire. Or maybe it’s just a Texas mind set, or for that matter, man’s desire to never give up…or die trying. In short, I detest the thought of impossible. The sentiment in 1967 was…we will never go to the moon. I also detest negative thinking. Maybe you need to walk on the beach in Bolivar during sunset and ponder the impossible. Free your mind.