GRAPEVINE, Texas—When it comes to climate change, some things are no longer debatable, said Pete Dailey, of AIR Worldwide. Addressing a packed room at NAMIC on Monday, Dailey explained and quantified what scientists know about climate change, while also quantifying the uncertainty about what climate change could bring.

Presenting 150 years of data, Dailey showed that the climate appears to be changing in unprecedented ways, including rising average-surface temperatures and sea levels. However, “averages don’t tell you much,” he said.

The average snowfall in the city of Los Angeles, based on the last hundred years, would be 0.01 inches of snow per year, Dailey said. “You have very frequent years of no snow, and one year of significant snow, but the average is actually different from both,” he explained. “What’s useful is to know the distribution of scenarios; to know that in most years you should expect nothing, but it’s important to know that every so often, you might get an extreme year.”

Dailey also explained that while the scientific consensus is that temperatures are on the rise, different regions are affected in different ways, and as a result, some locations are actually getting cooler. “Pay attention to distributions, not just averages,” he reminded the crowd, and also the increasing number of extreme events. For example, tropical and extra-tropical cyclones likely will decrease in frequency, Dailey said, but their intensity will tend to increase.

“If we look at hurricane risk, we might not really see a perceptible change in the average risk, the average losses that you might expect on a yearly basis,” Dailey said. “But what you might see, and what might be equally important to insurers is: how the uncertainty in that estimate is changing from one year to the next. And how can we use climate models to look at a range of potential scenarios.”

Because they look at long periods of time and at large areas, rather than the individual insured homes or properties, CAT models are not extremely precise, Dailey allowed. However, they are the best tools available for understanding the changing nature of uncertainty, Dailey said.

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