Karen Clark & Company (KCC), a provider of catastrophe risk modelling solutions, has released Version 3.0 of its US Winter Storm Model.
Arctic air outbreaks, typically linked to high-pressure systems, occur when extremely cold polar air plunges south into the mid-latitudes, causing extensive damage due to prolonged periods of sub-freezing temperatures.
KCC stressed that the severity of Arctic air outbreaks may increase as temperatures warm, driven by a phenomenon known as Arctic amplification. Scientists have observed that the Arctic is warming faster than the global average.
A warmer Arctic reduces the temperature difference between the cold arctic air and the warm air in the mid-latitude regions, weakening the polar vortex. When the polar vortex is weak, freezing arctic air is more likely to move into the mid-latitudes, increasing the risk of unusually cold temperatures in areas not prepared for them.
The Version 3.0 update introduces a refined method for calculating the effects of terrain on winter storms. It also introduces new secondary building characteristics for each sub-peril to capture the unique impacts of wind, snow and ice, and freezing temperatures on different building features and mitigation measures.
While annual expected losses from winter storms have not risen significantly, KCC reports that the probabilities of $20 billion and larger losses have increased.
“The winter storm peril—while not a solvency threat for major insurers—can produce large losses, as was demonstrated in February of 2021,” said Karen Clark, KCC Co-Founder and CEO. “A $30 billion winter storm event would not be a surprise today.”
This month, KCC also announced that it has released Version 4.0 of its US Severe Convective Storm (SCS) Model.
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