Has Climate Change Increased Natural Catastrophe Volatility?

You sometimes hear people say that climate change has not just increased the severity of events, but it’s also increased the volatility of events. i.e. that weather is specifically getting more 'extreme'. For example, the following from Aon [1] “Climate change, for example, is increasing this weather-related volatility”, or this from a BBC article "...climate models likely under-estimate the changes seen so far, but even those models suggest a doubling of the volatility" [2]

We've been playing around with the Swiss Re Global nat cat data in the last 2 posts, and I thought it could be interesting to see if these claims about volatility bear out in the data. More specifically, if annual cat losses are not just getting higher on average over time, but whether they are also become more volatility over time.

To try to isolate the volatility component and not be influenced by the change in average severity, I’m only going to look at on-levelled losses. (for more explanation of this adjustment, see the following blog post) [3].​ 

@ Alexego01 https://www.goodfon.com/city/wallpaper-download-3840x2160-snow-london-tower-bridge-river-thames-sneg-london-tauerskii.html
Photo not really related to the post, but looks lovely and is a 5 minute walk from my office. 

Read More