Weather and climate are the wildest of wild cards for insurers and risk managers—and this inherent uncertainty is certain to increase in coming years, according to the latest consensus report from the Intergovernmental Panel on Climate Change (IPCC). Jeff Masters, chief meteorologist for Weather Underground, offers a simple explanation of the complex science underlying the IPCC report: “When you warm up the atmosphere that means there's more energy available for severe weather events—so it makes sense that more things could happen,” he said.

And thanks to more things happening, “Extreme weather events are having a disruptive impact on the insurance industry,” according to a Forbes.com article on the IPCC report. “Climate-related economic disruption also compounds risks to global investments.”

This certainly isn't breaking news but puts the emphasis back on weather patterns for risk managers.,

“The IPCC reaffirmed what their previous reports have said,” according to Masters. “The scientific understanding has increased, our certainty has increased (and it was already pretty high), and scientists are in pretty widespread agreement that the planet is warming, humans are responsible, we are starting to see the impacts, and there are things that can cut down the amount of damage that we will see.”

Masters discussed the findings and nuances of the latest IPCC report, his forecast for the 2013–14 winter season, and his take on the role of meteorology in anticipating, managing, and reducing risk.

Question: The insurance industry pays close attention to climate research, and the latest IPCC report seems to reinforce its previous findings. What's new in this report?

Jeff Masters: The one pretty significant change was their estimate of sea level rise. They've gone up to 3.2 feet for the top-end scenario by 2100, and the estimate was in the two-foot range before. Basically, they didn't know what melting in Greenland and Antarctica would do prior to now. And I think they are still being conservative. They didn't include new models that predict a sea level rise of up to 6.6 feet (two meters) by 2100—but there is a new U.S.-based climate report, the U.S. National Climate Assessment, which does consider that as the top end. The new IPCC report is fairly conservative—and it is 195 governments approving this, so they are going to approve the most conservative thing they could say with scientific certainty.

Question: The increasing frequency of extreme weather events seems to have made your profession—meteorology—more important than ever for reducing risk. This is especially true for things like outdoor events, whose insurance coverage and safety plans often require having a meteorologist on call. Do you see a growing role for your profession thanks to climate change?

Masters: I think there's greater awareness now that outdoor events are very weather-vulnerable. We've had some close calls due to lightning strikes, and some catastrophes too. I anticipate we will see more meteorologists being employed. In Michigan where I live, we have a meteorologist appointed for The Big House [football stadium at the University of Michigan in Ann Arbor], and last season we had a game that ended early for the first time because of storms speeding up.

Question: Weather forecasters rely heavily on technology such as satellites. Do you have the data you need today—and will the expected loss of the National Oceanographic and Atmospheric Administration's satellites have an impact on your forecasts?

Masters: Our satellite capability is as good as it's ever been. But there is concern that the capability will go down if we don't fund the polar orbiting satellite program as in the past and we lose satellites in the next few years. That will degrade the quality of computer models if that happens. It's proven that if you take out some of the data, weather forecasts get worse. And when you have better weather forecasts, you end up saving a lot of money for the economy, because we're such a weather-dependent society.

Question: Extreme weather has become more frequent in recent years, as predicted by climate change models. In the near term, what kind of winter season are you predicting for 2013–14—should we anticipate more extreme weather events?

Masters: There's not a lot of predictability making seasonal forecasts when there's not El Niño or La Niña present, which is the case this year. NOAA and IRI, a weather group out of Columbia University, are calling for roughly equal chances for above- or below-normal winter precipitation. Extreme winter events due to the North Atlantic oscillation are predictable only a week or two in advance.

Question: How does the North Atlantic oscillation in the jet stream impact our seasonal weather?

Masters: It's measured as pressure difference between Iceland and the Azores Islands. The index has been kept for a couple of hundred years, so we have a lot of data and it's a pretty good indication of jet stream strength. When the pressure difference is high, that means the Icelandic low is strong and Azores high is strong. Then we have a powerful jet stream that tends to keep the arctic air bottled into the arctic. If the pressure difference is weak, we get a meandering jet stream which allows extreme weather to occur, including in parts of the globe that are not used to seeing the jet stream in their area, so we get extremes of heat and cold. We've seen a lot of those extreme patterns in recent years, and I anticipate we will see more—but where they manifest it's hard to know. We saw them last year, but the previous year we almost didn't have a winter.

Question: In the information age, anyone can be a “weather expert.” People are able to study, share, and discuss the weather more than ever thanks to the Internet and the proliferation of smart phones. Is that a good thing?

Masters: Weather impacts people everywhere and it's an important part of everyone's lives. It makes sense that social media has made it a big star and I think that's a good thing. People need to be aware of their surroundings—aware of Mother Nature—if you're not paying attention, Mother Nature can bite you.

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