Pacific typhoon migration poses increasing risks, says Chaucer

The area where Pacific typhoons reach their peak intensity is gradually shifting northward, increasing the risk to heavily populated regions in the Northwest Pacific, according to a new report from Chaucer.

Academic studies show that the area of maximum intensity is moving roughly 0.5 degrees of latitude northward per decade, equivalent to an approximately 56km shift. Over time, this could lead to greater risks for coastal areas.

Heinrich Beukes, Research Manager, commented, “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.”

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

Chaucer emphasised the importance of updating models to address the increasing risk to property and life posed by climate change for re/insurers.

Chaucer has incorporated the northward shift of typhoons into its View of Risk. The risk model now shows potential for greater expected risk of losses in the next decade.

Chris Wright, Head of International Property Reinsurance, stated, “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 adopting a similar approach with other typhoon-related risks, intensifying its research and adjusting its modelling for factors such as increased rainfall-induced flooding, storm surge (higher seas), typhoon intensity, and the westward migration of typhoons in the Northwest Pacific.

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