Master thesis defense by Chris Govier
Title: Climate Change, Tropical Cyclones and Insurance: An Explorative Study on Tropical Cyclone Wind Speed Maxima In South East Asia And Applications To The Insurance Industry.
Abstract: The most recent IPCC Assessment Report AR5 states that it is very likely that climate change is caused by anthropogenic emissions (IPCC 2013), and there is a likely increase of global Tropical Cyclone intensity. Using maximum wind speed as a measure of Tropical Cyclone intensity, this project has used climate model data to compare a baseline period (1980-2005) with predicted future warming of up to 3℃ by the end of the 21st century. An exploration into potential uses by the insurance industry identifies that index insurance could gain use from understanding future wind speed maxima. South-East Asia was selected as the study area as it is vulnerable to Tropical Cyclones, and there is the scope to apply innovative insurance methods to help mitigate the effect of climate change. Four latitudinal transects were analysed. Comparing ERA 5 Reanalysis and three CMIP 5 member models (MPI-ESM-MR, MIROC5 and GFDL-ESM2M) over the historical period and three future periods representing 1℃, 2℃ and 3℃ warming suggest that there could be an intensification in tropical cyclone windspeed in the study area. A block maxima approach is used to isolate the yearly maximum wind speed for each transect. The modelled data is then fitted to a Weibull distribution, and validation checks carried out by comparing with a Generalized Extreme Value Distribution. The results of future return period values suggest that Weibull may not be the best fit for extreme wind speeds in Tropical Cyclones. A Disaster Impact calculation for each of the transects suggests that population growth in South-East Asia is the most significant influence of impact, this area needs to be developed further to ensure a holistic appraisal of impact is considered. Further research will develop the transect approach and the disaster impact calculation, to provide actionable points for the insurance industry.