Climate science is an exercise in speculation, and because it is, insurers who want to accurately forecast risks connected with climate change—natural or man-made—are in quite a quandary.
In the latest example of this, NASA scientists have found that the global sea level this summer is a quarter of an inch lower than last summer, in sharp contrast to the gradual rise the ocean has experienced in recent years, according to a recent Washington Post article.
The change stems, the article notes, from two strong weather cycles over the Pacific Ocean—El Niño and La Niña—which shifted precipitation patterns, according to scientists at NASA’s Jet Propulsion Laboratory in Pasadena, Calif. The two cycles brought heavy rains to Brazil and the Amazon, along with drought to the southern United States.
The Post adds that this year the continents got an extra dose of rain, so much so that global sea levels actually fell throughout most of last year. Climate scientist Josh Willis, who works at NASA’s Jet Propulsion Laboratory, is quoted in the article as warning that this water will eventually return to the ocean, and the long-term trend of rising sea levels will continue. He goes on to say, however, that “we really have a lot left to understand” before being able to offer a more precise estimate of future sea-levels.
Interestingly, information from the European Space Agency (Envisat) shows that a two-year decline in sea levels is continuing at a rate of 5mm per year. So what is the poor property/casualty insurer to make of these numbers? Are they proof that fears of melting ice caps and consequent floods over the next nine decades are ill-founded—or are they mere momentary reverses in a larger overall trend that will take the levels higher over the next 90 years or so?
The truth is that no one knows the answers, and that anyone who says he or she does is just guessing. Meanwhile, all this political and academic posturing leaves insurers out in the cold in terms of solid data on which to plan for future risks. Opinions on this very important topic vary almost as much as the numbers do.
The Post article notes that the question of how much the ocean could rise due to warming is a topic of intense debate. “In the past two decades global sea levels increased at a rate of roughly 0.12 inches a year, compared to 0.07 inches from 1961 to 2003, according to satellite data." A recent tide gauge study of sea levels in Australia and New Zealand, published in the Journal of Coastal Research, provided readings that suggested the rate of ocean rise has declined in the past decade.
So it’s up and it’s down, kind of like a marine version of the wild and wooly stock market gyrations. Where will insurers place their bets? My hunch is that carriers will publicly speak the politically correct line of preparing for dire consequences, but behind closed doors they will do little changing until a more definitive trend is established. That’s just they way we roll, and with the uncertainty that continues to beset us daily in both the financial and global climate markets, it is perhaps the wisest course.
Ara C. Trembly (www.aratremblytechnology.com) is the founder of Ara Trembly, The Tech Consultant, and a longtime observer of technology in insurance and financial services.
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