Jacob Pastor-Paz, Ilan Noy, and others conducted research that showed that New Zealand’s Earthquake Commission (EQC) should prepare for high payouts related to increased weather-related damage. These increases are between 7% and 8% for 2020 – 2040 and 9% and 25% for 2080 – 2100.
EQC is New Zealand’s public insurer and provides residential insurance for some weather-related damage. Since 2000, the EQC has paid out 450 million in payouts due to weather-related hazards.
According to this research, payouts will increase as climate change brings more intense and extreme weather events, particularly extreme precipitation, that will translate to more severe damage to residential properties and an additional financial burden for the EQC.
How did researchers come up with their projections of future damages and figures?
First, researchers estimate the relationship between extreme precipitation events and the ECQ’s weather-related liabilities, analysing over 8000 claims between 2000 and 2017.
They used this relationship with climate projections from downscaled Regional Climate Models to predict the impact of future extreme weather events on EQC insurance claims up to 2100.
The study’s results show that a future low-emissions scenario, when GHG concentrations in the atmosphere are low, will see a decrease in damages towards the end of the century, and a future with the highest-emissions scenario will see a difference in damages doubling between 2020 and 2040 and 2080 to 2100.
The study’s information can also be used by private insurers, regulators, and policymakers to assess the performance of both public and private insurers that cover weather-related risks under climate change.
Local governments, stakeholders, and infrastructure managers can also use the study’s data to strengthen climate adaptation and mitigation strategies, especially in flooding-prone and climate-vulnerable areas.
To read the full study, CLICK on the button below:
Sources
Pastor-Paz, Jacob, Ilan Noy, Isabelle Sin, Abha Sood, David Fleming-Munoz & Sally Owen.2020. “Projecting the effect of climate change-induced increases in extreme rainfall on residential property damages: A case study from New Zealand.” Motu Working Paper 20-02. Retrieved from http://motu-www.motu.org.nz/wpapers/20_02.pdf.
How will climate change-induced increases in extreme rainfall effect EQC liabilities? (2020, March 5). The Deep South. National Science Challenge. Retrieved from https://www.deepsouthchallenge.co.nz/news-updates/how-will-climate-change-induced-increases-extreme-rainfall-effect-eqc-liabilities.
BACKGROUND PHOTO CREDIT: By Gabriel – Flickr: Cathedral Square 24/02, CC BY 2.0, Link
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