New report shows the potential impact of climate change on flood risk in Europe, with a focus on the insurance industry
A recent study conducted under the European Union's PESETA IV project explored the potential effects of climate change on river flooding and the associated damage across Europe.
The researchers have employed a method of refinement that involves statistical modelling of the predicted changes in damage, based on fluctuations in the Global Mean Surface Temperature (GMST).
By making certain assumptions, these predictions can be used to estimate how much damage might vary between any two periods of time for any given GMST scenario. This information can then be used to modify many of the metrics that insurance companies use to measure flood risk, such as average annual losses, exceedance probabilities, and yearly loss tables.
The study shows how quickly or slowly the predicted flood damage changes in response to changes in the Global Mean Surface Temperature (GMST). For example, if the GMST increases by 1 degree, the rate of change shows how much the predicted flood damage is expected to increase or decrease. This is valuable information that insurance companies can use to adjust their risk models and financial forecasts.