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A new article directly blames climate change for rising U.S. insurance rates.

While the article mulls the various and numerous reasons for rising rates, it calls out what the author sees as a “common thread” that ties in rising rates and a world where weather seems to be getting more extreme.

“Climate change is fueling more severe weather, and insurers are responding to rising damage claims,” author . “The losses are exacerbated by more frequent extreme weather disasters striking densely populated areas, rising construction costs and homeowners experiencing damage that was once more rare.”

He points to the emergence of more damaging hailstorms, higher storm surges, massive wildfires, and severe heat waves for increasing risks—and thus rising rates.

“Increasing global temperatures lead to more extreme weather, and that means insurance companies have had to make higher payouts. In turn, they have been raising their prices and changing their coverage in order to remain solvent,” Hoffman writes. “That raises the costs for homeowners and for everyone else.”

The Conversation article lists 26 states where the average homeowners’ insurance premium increased by more than 25% from 2017 to 2023 using data from S&P Global and the Minneapolis Federal Reserve.

Rates in Texas (up nearly 60%), Colorado, Arizona, Utah and Nebraska led the way on the list.

Climate and AI

New research examines the changes reshaping the insurance industry and how it views risks, driven by the dangers of climate change and new predictive technologies.

ZestyAI surveyed more than 200 property/casualty insurance professionals on risk assessment methods, what insurers expect from AI-based models, how carriers view transparency and regulatory adoption and the top risk worries for the industry.

“Increasingly frequent and severe natural catastrophic events, such as convective storms and wildfires, are raising major concerns in the insurance industry and

challenging carriers to find more accurate and proactive methods to predict and manage climate risk,” states.

The survey shows 54% of respondents use traditional actuarial models based on historical claims data, 30% use stochastic models and 18% use AI and machine learning models.

Respondents disagreed over which type of model is most accurate for predicting risk: 27% believed traditional actuarial models are the most accurate; 26% favored stochastic models; 20% consider AI and machine learning to be the most accurate. More than a quarter (27%) of respondents say a combination of different models offers the best risk prediction.

The percentages for favored model types varied depending on whether a company was an insurer, a reinsurer or an Insurtech.

“When the numbers were examined more closely, it was found that reinsurers and insurtechs are convinced that AI models help better manage climate-related losses,” the report states.

Europe Storms

Climate change made Europe’s deadly floods worse and more likely, according to a Bloomberg article on Insurance Journal this week.

A report by World Weather Attribution shows that record rainfall and resulting flooding in Europe earlier this month was twice as likely due to climate change.

The flooding impacted Europe when Storm Boris struck the region Sept. 12, affecting Poland, Romania, Slovakia, Austria, the Czech Republic and Germany, according to the article.

“Our study has found the fingerprints of climate change in the blasts of rainfall that flooded central Europe,” Joyce Kimutai, a researcher at Imperial College London and one of the contributors to the report, told Bloomberg. “Yet again, these floods highlight the devastating results of fossil fuel-driven warming.”

The researchers used weather data and climate models to show how climate change affects weather patterns, and they compared the rainfall’s likelihood and intensity with that of the climate before the current warming trend.

“We need to prepare for even more heavy rainfall than what is predicted from these models,” Friederike Otto, co-lead of WWA, stated.

Sea Level Website

A new federally funded website designed to help communities prepare for rising seas enables users to punch in their state, city or region to see where the risks are, as well as to get recommended strategies to mitigate the consequences.

The U.S. Interagency Task Force on Sea Level Change launched on Monday.

The site explains the latest science on sea levels in a Sea Level 101 section, including the impact on the environment and coastal communities.

A National Sea Level Explorer section enables users to drill down into the data and see the results of climate change.

Punch in San Francisco, California, for example, and the site tells users that the sea level rose 4 inches from 1970 to present. Under an intermediate climate change scenario, sea level is expected to rise 7 inches from 2020 to 2050.

Boston, Massachusetts, has seen sea level rise 8 inches since 1970. Levels are expected to rise 11 inches under an intermediate scenario by 2050.

There were 35 minor high tide flood days in the 1970’s. In 2050, Boston is projected to register up to 70 minor high tide flood days per year, according to the website.

Past columns:

• ‘Impossible’ Weather Increasingly Blamed on Climate Change
• CBO Says Mortgage Subsidy Cost from Flood Damage to Hit $395M by 2053
• Activist Report Shows More Insurers Making Climate-Related Disclosures
• World Meteorological Organization: Good Chance for More Record-Setting Global Temps
• Poll: Climate Change Concerns Grow, but Few Believe Biden’s Climate Law Will Help

Topics Trends USA Pricing Trends Climate Change