Northeastern cities, which were previously less affected by major storms, may experience significant increases in hurricane exposure as climate change intensifies risks.

Research from MS Amlin indicates that insured losses from US hurricanes could increase by nearly 50% if global temperatures rise by 2°C, highlighting a growing mismatch between climate risk and insurance pricing.

Since 1990, average economic losses from hurricanes in the US have grown by about US$22 billion per decade, primarily driven by population growth along coastlines.

Projected increases in insured losses include a 64% rise in New York, over 70% in Rhode Island and Massachusetts, and a 44% increase in Florida, which faces the largest absolute rise.

The East Coast, especially Florida, is expected to see substantial spikes in hurricane-related insured losses, with New York and Rhode Island/Massachusetts experiencing increases over 60%.

In 2024, global insured losses from natural disasters surpassed US$140 billion for the fifth consecutive year, reflecting a persistent upward trend in catastrophe costs.

Warming ocean temperatures are fueling an increase in stronger hurricanes, particularly Category 4 and 5 storms, which are likely to maintain their intensity longer and reach further north.

This climate-driven intensification means more frequent and severe storms, with stronger hurricanes potentially impacting regions previously less vulnerable.

MS Amlin reports a rise in its net claims ratio due to increased hurricane activity, indicating broader challenges in the catastrophe insurance market.

MS Amlin CEO Andrew Carrier warns of an escalating mismatch between risk exposure and insurance pricing, calling for reforms in building codes and risk management to better address climate change impacts.

Modeling a repeat of the 2022 hurricane season, which caused $62 billion in industry losses, suggests that under a 2°C warming scenario, losses could exceed US$90 billion.

Dr. Sam Phibbs from MS Amlin emphasizes that the projected 50% increase in losses may underestimate future risks, especially considering sea level rise and urban growth.