Wednesday, August 31, 2005

All Katrina, all the time:

One item I have not heard yet on the news.

The insurance industry is caught in an interesting situation. They are well aware that one of the largest consequences of climate change is an increased frequency of more intense storms. This has a very direct consequence for their projected losses in any given season. Most of them have realized that their actuarial models based on historical storm frequencies are not the state-of-the-art anymore, and they have spent a great deal of money on computer models that match storm predictions to real estate and infrastructure inventories in order to understand what the consequences of a storm season might be.

However, the law constrains them to base their premium rates on historical records. They will therefore always be behind the curve, and they know that there will be little goodwill from a public that perceives them with suspicion. After all, who has the money to put up the largest building in just about every city?

$25 billion of damage and counting.

An interesting simulation of flooding done by NASA using Shuttle Radar Topography data: Quicktime, 6Mb. Current flooding is between the 3 and 4 meter marks.


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