“The growing number of climate events has left the insurance industry reeling,” said Jennifer Rasmussen, PhD, Vice President and Head of Thought Leadership and Publications for SitusAMC Insights, a division of SitusAMC, and co-author of the white paper. “Many insurers and reinsurers have already seen their 2020 financials severely downgraded. As the intensity and scope of future catastrophes grow, insurance rates for property owners will likely rise significantly in the near future.”
The white paper describes how higher temperatures attributed to climate change will increase the severity of Atlantic hurricanes as well as create a “tinderbox” in Western states due to worsening droughts. For example, Texas will have the highest threat level for wildfires in the country, with 72% of the state’s population at risk, according to Climate Central.
Recent demographic and migration trends are exacerbating the problem, as more people are moving to fire-prone and flood-prone areas in the West and Southeast. Current migration trends will place an additional 1.2 million homes at risk for flooding over the next 30 years, an increase of 10% from today, according to data from First Street Foundation.