Disaster area: Will 2020 bring more extreme weather events?

The Caribbean may be known for its sun but, as anyone who lives in the region knows, the weather forecast can often turn sinister. Flooding, tsunamis, tropical storms, earthquakes and hurricanes are all an unfortunate part of island life, making the Caribbean one of the most disaster-prone regions in the world.

Life-threatening

Over the last decade, 152 million people across Latin America and the Caribbean have been affected by 1,205 natural disasters, according to the UN Office for the Coordination of Humanitarian Affairs. This staggering number includes 548 floods, 330 storms and 75 earthquakes.

In the Caribbean, the biggest concern is hurricanes which can develop with minimal warning and devastate entire islands. The climbing frequency and intensity of these storms mean that Caribbean nations now have insufficient time between occurrences to fully recover, ensuring that the lasting economic and social effects are felt for years. UN figures reveal that Cuba, Mexico and Haiti have been the most affected by storms since 2000 with 5,000 deaths (more than 85 per cent of which occurred in Haiti) and a total of US$ 39bn in damages.

While storms such as category 5 Hurricane Dorian make the news, weaker weather can be just as devastating. In 2015 Tropical Storm Erika passed over the north of Dominica with winds of just 50mph. The seemingly innocuous storm also brought a torrent of rain, however, which triggered flash floods and landslides that affected just under half of the island’s population. By the time Erika had rained herself out, Dominica was left with a US$ 483mn clean-up.

Hurricane season may be over, but earthquakes can strike at any time. In 2010 Haiti was rocked by a magnitude 7.0 earthquake that proved catastrophic, killing 222,570 and injuring 300,000. The fall-out from an earthquake is largely dependent on human factors; poor building codes, inadequate response capacity and limited preparedness all amplified the damage in Haiti.

Haiti’s quake may be a decade ago but earthquakes remain a threat to the region, as recent incidents show. A few weeks ago a 7.7 quake was reported in the Caribbean Sea between Jamaica and Cuba and, last month, Puerto Rico suffered a magnitude 6.4 quake, following a week’s worth of smaller warning tremors. The US Geological Survey (USGS) estimates that around 500 tremors shook the island over 10 days. Shortly after Puerto Rico, a 5.2 magnitude earthquake hit several islands in the Eastern Caribbean. With the epicentre to the south of Dominica, shaking was reported in Martinique, St. Vincent, Barbados and Saint Lucia.

Earthquakes aren’t just potentially devastating in themselves; they can also cause tsunamis. While the Caribbean has thankfully avoided these giant waves over the past few decades (the last major tsunami in the region struck in 1946), the potential is high as long as earthquakes keep occurring and, given that 70 per cent of the region is in low-lying coastal areas, the impact could be catastrophic.

Expert predictions

The USGS has warned that there may be more earthquakes to come as the Caribbean remains an active seismic zone. Much of the region lies above the uneasy meeting point between the North America and Caribbean tectonic plates. 

The USGS has stepped up its efforts to predict and track earthquakes in the region, saying: “After the devastating Hurricane Maria occurred in Puerto Rico, the federal government invested in rebuilding damaged seismic stations in the region. These stations have made it possible for the USGS and our partners at the Puerto Rico Seismic Network to provide more accurate and rapid information about the earthquakes and their possible impacts, along with better forecasts of potentially damaging aftershocks.”

Predicting earthquakes is a tough business. Scientists may be able to measure plates and pinpoint unsteady fault lines but knowing exactly when those plates will shift is harder to determine. The technology is not yet sophisticated enough and the variables are too high. Even the best early warning detection systems may only buy a few minutes to seek shelter. 

Hurricanes are easier. By closely monitoring climatic conditions such as El Niño/El Niña, scientists can create a fairly accurate picture of how busy the June to November period will be. The National Oceanic and Atmospheric Administration (NOAA) doesn’t usually publish its Atlantic Hurricane Season Outlook until spring, but the consortium Tropical Storm Risk, which is comprised of experts on risk management and seasonal forecasting from University College London, published its extended range forecast in December. The group predicts an average season this year, based on near-to-average wind speeds, but stresses that the accuracy of a forecast six months in advance is not always reliable. 

The Caribbean Climate Outlook Forum (CariCOF) takes a more short-term approach, monitoring weather conditions over 3-month and 6-month periods. Its latest bulletin, covering up to the end of March, warns of short-term and long-term drought in the region, particularly in Belize. From April to June 2020, CariCOF is expecting an intense transition from the dry season to the wet season as islands experience hotter and wetter weather than the norm. Flash floods could threaten Belize and the Greater Antilles in May while heatwaves are predicted for Belize and Trinidad.

Insuring resilience

Climatic uncertainty and the Caribbean’s inherent vulnerability pose a problem for the agencies charged with insuring against these risks. Governments can take advantage of the Caribbean Catastrophic Risk Insurance Facility (CCRIF) which covers them for tropical cyclones, hurricanes, earthquakes and even excessive rainfall. Since 2007 CCRIF has paid out US$ 152mn to thirteen member governments, including US$ 12.8mn to the Bahamas following Hurricane Dorian. 

For citizens, it may not be so easy to access funds. Throughout the Caribbean, costly coverage for natural disasters is out of reach for many homeowners and businesses. Unless required by lending institutions, property owners often decide to forgo insurance coverage or delay signing on the dotted line for their policies. Soaring insurance rates and growing fiscal constraints have only exacerbated the problem.

But even considering this protection gap, the regional insurance industry unavoidably takes a substantial hit in the wake of natural disasters. The Bahamian insurance industry absorbed an estimated US$ 1.5bn loss thanks to Dorian, according to analytics group AIR Worldwide. The huge burden that disasters place on insurers can be offset by the reinsurance market, where multiple insurance companies band together to share the risk. Companies purchase policies from other insurance firms to limit their own exposure and the premiums are shared among all the insurers involved. 

Dorian has made the reinsurance market nervous and ratings agencies are predicting that this hurricane’s impact, as well as the likelihood of future events, will drive up reinsurance renewal rates by as much as 5 per cent in 2020. According to data from UBS, the reinsurance industry has excess capital of around US$ 30bn although an estimated US$ 70bn of natural catastrophe losses in 2019 is likely to erode that figure. 

As the threats increase, insurance and reinsurance will only become more costly unless there is corresponding innovation in how those threats are mitigated. Senior Natural Catastrophe Specialist at the Swiss Re Institute Michael Gloor explains: “Today climate change is a manageable risk for reinsurers. However, the rising threat is alarming. In response, the industry needs to improve risk models to better assess climate hazards. Insurers can also play a key role in advancing the transition to a low-carbon economy by providing solutions to manage risks associated with large-scale investments in new technology and innovation.”