Welcome to the latest issue of WTW’s Natural Catastrophe Review, a bi-annual publication that brings insights from our experts — including our WTW Research Network — to examine recent natural disasters, lessons learned, and emerging trends.
We hope to provide new perspectives that will help with natural catastrophe risk management and resilience in sectors such as insurance, banking, government, and corporates across all industries.
In this edition, we look at some of the physical, vulnerability, and socio-economic factors that contributed to natural disasters in the first half of 2023. We also consider what the rest of the year might hold with El Niño's return and the upcoming North Atlantic Hurricane season.
The first six months of 2023 were dominated by the devastating Kahramanmaraş earthquakes in Türkiye & Syria and several weather-related catastrophes. A record-breaking start to the U.S. tornado season resulted in billions of dollars in damage, while the ongoing megadrought in Chile brought destructive wildfires. Canada is also experiencing its worst-ever wildfire season, with a record-breaking 8.33 million hectares destroyed after only two months of the May-September fire season. Cyclones Freddie, Gabriele, and Mocha had wide-ranging impacts in the Southern Hemisphere, and significant flooding affected a number of countries including Italy, Ethiopia, Somalia, Malaysia, Brazil, and New Zealand.
Climate change will once again be at the forefront of business and government agendas as a result of these events. However, it is critical not to forget the role socio-economic factors play in determining the severity of extreme weather outcomes.
It is nearly 20 years since Neil Smith – who was a Distinguished Professor of Anthropology and Geography – published his seminal essay There’s No Such Thing as a Natural Disaster. This was written in the aftermath of Hurricane Katrina and initiated a conversation on how we think about natural catastrophes.
Natural hazards only become disasters when they intersect with an inadequately prepared society. Katrina was a disaster because underlying social inequalities in New Orleans worsened storm damage and challenged disaster recovery. The wildfires that ravaged Chile in February this year were a disaster because of the intermixing of forestry plantations and communities (Section 2.5). In New Zealand, flooding following Cyclone Gabriele was exacerbated by debris from forestry activity that clogged rivers and destroyed buildings and infrastructure (Section 2.4). And the recent devastation in Italy’s Emilia-Romagna region from flooding was worsened by land-use change (Section 2.8).
If we are to improve resilience in a warming world, we must therefore look not only at how the frequency and severity of extreme weather events are changing, but also at how interactions between hazards and society are changing too. In New Zealand, there is a concerted effort to “build back better” following the second wettest summer on record. This requires a holistic approach that considers the physical, social, and economic aspects of affected communities, as well as investment in risk management research to inform decision-making.
In February, the largest earthquake to hit Türkiye in nearly a century killed over 50,000 people and destroyed thousands of buildings. When a major disaster occurs, there are often lessons to be learned that will help us build back better. For example, following the 1999 Mw 7.6 Izmit earthquake in northern Türkiye, new building regulations and a national insurance pool were put in place to improve resilience. As lessons begin to emerge from the most recent event, we must remember to think laterally to improve risk management, particularly in other parts of the world where recent observations are lacking. In Section 2.1, Temblor's Ross Stein examines the lessons from Türkiye that can be applied to California, including the possibility of large events on secondary faults, interacting mainshocks that attack buildings twice, and the likelihood of extreme shaking near the rupture and in deep basins.
In recent years, there has been an increased focuson socio-economic tipping points, where gradual changes in the climate system could result in abrupt changes to socio-economic systems. An example is Hawke's Bay, a region on the east coast of New Zealand's North Island, which is one of the country's most desirable locations for coastal living. In February, Cyclone Gabrielle brought destruction to the North Island, with record-breaking winds and flooding that destroyed houses, infrastructure, and crops. In Section 2.4, Neil Gunn discusses the impacts of Gabrielle and looks at recent research that suggests Hawke's Bay is approaching a socio-economic tipping point, where losses from the gradual increase in extreme weather events could lead to the collapse of property prices.
Intense tropical cyclones during the early months of the year are rare. On average, there have been 1.1 Category 5 equivalent storms between January and May since 1980. However, this year has been unusual, with five events in the first five months: Freddy, Kevin, Isla, Mocha, and Mawar. In Section 2.3, we review how several of these storms have broken individual records, most notably Freddy, which produced the highest Accumulated Cyclone Energy ever recorded worldwide. With global sea surface temperatures currently at all-time highs since satellite records began, the attention will now turn to the upcoming North Atlantic and Western Pacific seasons to see if the trend continues. The largest number of Category 5 equivalent tropical cyclones ever recorded in a calendar year is 12 in 1997.
While focus is often placed on learning lessons from large natural disasters – such as the recent earthquakes in Türkiye – it is equally important to consider what we can learn when catastrophes don’t happen. For example, understanding the factors that contribute to the variability in extreme weather – including quiescent periods – is important for planning and risk management in industries such as insurance and agriculture. In Section 2.9, Adam Scaife and colleagues from the University of Exeter investigate why there were so few European windstorms during the winter of 2022/2023 and why this was not entirely predicted by seasonal forecast models
For three years in a row, the Pacific Ocean has been stuck in its La Niña configuration, producing what is known as a “triple dip” event. La Niña is usually associated with catastrophic flooding in Australia – as we witnessed in 2022 – and busy North Atlantic hurricane seasons, such as the record-breaking year in 2020. But now the Pacific has flipped to El Niño, with the U.S. National Oceanic and Atmospheric Administration declaring its arrival on June 8. In Section 3.1, Scott St. George writes about some of the meteorological and socio-economic effects that businesses should expect from an El Niño event. James Done from the National Centre for Atmospheric Research (NCAR) then reviews what its appearance could mean for the upcoming North Atlantic hurricane season in Section 3.2.
As we begin to process the lessons learned from these most recent events and incorporate new knowledge into risk models, it is important to remember that preparedness and resilience require more than just better models. We must also consider how our models, with all their simplifications, can be best used to inform real-world decision-making.
|Natural Catastrophe Review January - June 2023