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

And thanks to more things happening, “Extreme weather events arehaving a disruptive impact on the insurance industry,” according toa Forbes.com article on the IPCC report. “Climate-relatedeconomic disruption also compounds risks to globalinvestments.”

This certainly isn't breaking news but puts the emphasis back onweather 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), andscientists are in pretty widespread agreement that the planet iswarming, humans are responsible, we are starting to see theimpacts, and there are things that can cut down the amount ofdamage that we will see.”

Masters discussed the findings and nuances of the latest IPCCreport, his forecast for the 2013–14 winter season, and his take onthe role of meteorology in anticipating, managing, and reducingrisk.

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

Jeff Masters: The one pretty significant changewas their estimate of sea level rise. They've gone up to 3.2 feetfor the top-end scenario by 2100, and the estimate was in thetwo-foot range before. Basically, they didn't know what melting inGreenland and Antarctica would do prior to now. And I think theyare still being conservative. They didn't include new models thatpredict a sea level rise of up to 6.6 feet (two meters) by 2100—butthere is a new U.S.-based climate report, the U.S. National ClimateAssessment, which does consider that as the top end. The new IPCCreport is fairly conservative—and it is 195 governments approvingthis, so they are going to approve the most conservative thing theycould say with scientific certainty.

Question: The increasing frequency of extremeweather events seems to have made your profession—meteorology—moreimportant than ever for reducing risk. This is especially true forthings like outdoor events, whose insurance coverage and safetyplans often require having a meteorologist on call. Do you see agrowing role for your profession thanks to climate change?

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

Question: Weather forecasters rely heavily ontechnology such as satellites. Do you have the data you needtoday—and will the expected loss of the National Oceanographic andAtmospheric Administration's satellites have an impact on yourforecasts?

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

Question: Extreme weather has become morefrequent in recent years, as predicted by climate change models. Inthe near term, what kind of winter season are you predicting for2013–14—should we anticipate more extreme weather events?

Masters: There's not a lot of predictabilitymaking seasonal forecasts when there's not El Niño or La Niñapresent, which is the case this year. NOAA and IRI, a weather groupout of Columbia University, are calling for roughly equal chancesfor above- or below-normal winter precipitation. Extreme winterevents due to the North Atlantic oscillation are predictable only aweek or two in advance.

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

Masters: It's measured as pressure differencebetween Iceland and the Azores Islands. The index has been kept fora couple of hundred years, so we have a lot of data and it's apretty good indication of jet stream strength. When the pressuredifference is high, that means the Icelandic low is strong andAzores high is strong. Then we have a powerful jet stream thattends to keep the arctic air bottled into the arctic. If thepressure difference is weak, we get a meandering jet stream whichallows extreme weather to occur, including in parts of the globethat are not used to seeing the jet stream in their area, so we getextremes of heat and cold. We've seen a lot of those extremepatterns in recent years, and I anticipate we will see more—butwhere they manifest it's hard to know. We saw them last year, butthe previous year we almost didn't have a winter.

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

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