Understanding Global Temperature Anomalies and Their Impact on Weather Events

It's finally here. Proud to announce the launch of the Gallagher Re's Natural Catastrophe and Climate Report: 2024. https://lnkd.in/gMST_MnU This report provides a robust view on natural perils, climate change, and sustainability issues. The document not only provides a wealth of valuable data, statistics, insights, and trend analyses, but also offers deeper dives into specific topics that are not only relevant to the insurance industry but also for a much broader swath of public and private sector interests. One particular in-depth area of focus in this year's report is an analysis of the ongoing drivers of US severe convective storm (thunderstorm) losses. 2024 was a costly, impactful, and meteorologically record-setting year. We saw a continuation of US SCS outbreaks leading to sizeable losses. The impact of several significant tropical cyclone landfalls (Helene, Milton, Yagi, Chido -- among others). The dichotomy of catastrophic flood events (UAE, Spain, Brazil, Germany, China) along with major drought conditions across swaths of continental regions (Americas, Europe, Africa). All of this occurred in the context of 2024 being the warmest year ever recorded. We're now witnessing multiple global agencies showing annual temperature anomalies running beyond the 1.5°C pre-industrial baseline (1850-1900). While we'd need to see this averaged over a full climatological average cycle (30 years) to officially surpass the Paris Agreement benchmark, it is psychologically a big deal to see land / ocean temperatures now start to creep up to and exceed this threshold. Perhaps the biggest takeaway for 2024 was the significance of billion-dollar insured loss events occurring in non-traditional high loss catastrophe regions of the world. Society tends to gravitate towards focusing on the most highly populated and economically mature regions of the world for catastrophe risk, but the events of 2024 show we are now witnessing the growing vulnerabilities and swings in volatility everywhere. We're already off to an exceedingly active start to 2025 with the wildfire outbreak in Southern California. What will the rest of 2025 bring? Stay prepared and know your risk. Huge thanks to my co-authors Brian Kerschner and Jin Zheng Ng for their work on this report. Additional kudos to Marie Ekstrom, Zahra Jasmin-Uddin, and Kathryn Couperwhite. And finally, major thanks to Eileen Shannon, Julia Lane, and several others on the Gallagher Re marketing team for getting this report out the door.

𝗨𝗻𝗲𝘅𝗽𝗲𝗰𝘁𝗲𝗱 𝗛𝗲𝗮𝘁: 𝗥𝗲𝗳𝗹𝗲𝗰𝘁𝗶𝗼𝗻𝘀 𝗼𝗻 𝗔𝗻𝗼𝗺𝗮𝗹𝗼𝘂𝘀 𝗧𝗲𝗺𝗽𝗲𝗿𝗮𝘁𝘂𝗿𝗲𝘀 Last year shattered temperature records, exposing flaws in our climate models. Scientists didn't foresee such a spike, prompting a reexamination of assumptions. Earth’s increasing darkness due to shrinking sea ice and thinning clouds means less heat reflects into space. This rapid change defies our standard predictions. James Hansen, ever the outlier, foresees sustained temperatures significantly above pre-industrial levels by May 2024. He attributes this to accelerating polar ice melt, disrupting ocean currents and hinting at an imminent, dramatic sea level rise. His warnings, once dismissed, now demand serious attention. Hansen's call for urgency contrasts sharply with the mainstream’s cautious pace. This hesitance, while rooted in scientific rigor, risks delaying vital actions. Oceanographer John Englander echoes Hansen, stressing the immediate need to address rising sea levels. As last year’s anomalies become undeniable, a shift in scientific consensus toward more decisive measures may be necessary. Following Hansen's insights could be our best bet as we brace for the escalating heat and its profound impacts. #ClimateChange #GlobalWarming #SeaLevelRise #EnvironmentalScience #Sustainability

Here are three weather events unfolding right now and their potential market impacts: 1. 🔥 Record-Breaking Heatwaves in the Northern Hemisphere What's Happening: North America and Europe are enduring record-high temperatures, exacerbating droughts and increasing wildfire risks. These heatwaves are a direct consequence of rising global temperatures, driven by human-induced climate change. Market Impact: Energy sectors are under pressure as electricity demand spikes, while agricultural outputs are threatened, potentially driving up food prices. Healthcare costs are also rising as populations grapple with heat-related illnesses. Expect volatility in stocks tied to energy, agriculture, and healthcare sectors as these heatwaves disrupt normal operations(Nature,IPCC). #2 🌳 Severe Drought in the Amazon What's Happening: The Amazon Basin, a vital carbon sink, is experiencing severe drought conditions. This situation is not only a climate crisis but a potential economic one, as the region plays a crucial role in global biodiversity and carbon sequestration. Market Impact: Deforestation and drought are set to disrupt supply chains, particularly in timber and agriculture, leading to scarcity and higher prices for raw materials. This disruption could ripple through global markets, impacting commodity prices and leading to increased uncertainty in sectors reliant on these resources(Yale Climate Connections,IPCC). 3. 🌊 Coastal Flooding in Southeast Asia What's Happening: Rising sea levels and land subsidence are causing major flooding in coastal regions like Jakarta, Indonesia. The combination of these factors could lead to massive infrastructure damage and the potential collapse of megacities. Market Impact: The threat to coastal infrastructure is alarming, with potential losses in real estate value and increased insurance claims. Markets may see a shift as investors reassess the risks associated with coastal regions, potentially leading to a reallocation of capital and increased borrowing costs for infrastructure projects aimed at mitigating these risks(Yale Climate Connections,IPCC). As these and other events continually unfold, they underscore the growing financial risks posed by climate change. #ClimateChange #FinancialMarkets #RiskManagement #Sustainability Anthropogenic