Much of the media attention on climate change focuses on themeteorological effects, such as warmer temperatures, meltingicecaps and rising oceans.

Of more importance to the insurance industry are questions thatreceive far less attention, for example:

• How will these trends impact catastrophe reinsurance contractsand related securities?
• Will hurricanes be more frequent, more severe or both?
• Will insurance losses be greater?

A new report from Karen Clark & Company (KCC), titled“Climate Changeand Hurricane Loss: Perspectives for Investors,” looks at morethan 100 years of historical hurricane data to provide a basicperspective on the frequency and severity of insurance loss forinvestors. The report also examines the challenges of predictinghurricanes in the short term and offers perspective for long-terminvestors in the catastrophe market.

KCC’s report provides context for investors as well as evidencethat climate change has had no measurable effect on the NorthAtlantic hurricanes that are most often responsible for CAT marketlosses. According to the Intergovernmental Panel on Climate Change,as cited in KCC’s report, loss levels have gone up over timeprimarily due to increases in the value of buildings now standingin the path of hurricanes.