Study Ties Cyclone Damage, Global Warming

A successful effort to restrict global increases in temperature could reduce the cost of tropical cyclone damage by 80 percent, a risk modeling firm and a British trade group have concluded.

The Association of British Insurers, determined the increase in losses can be reduced by keeping the earth's temperature rise from exceeding 2 C or 35.6 Fahrenheit by 2080.

ABI's research also included data from AIR Worldwide Corp. in Boston. The report of their findings is titled "The Financial Risk of Climate Change."

AIR found that if U.S. hurricane wind speeds increased by as little as 4 percent on average, insured losses could increase by as much as 45 percent per year. The estimates increase upward to 75 percent in the presence of a 6 percent rise in wind.

ABI's analysis recommended reducing carbon gas emissions in order to slow down global temperature increases. Failure to do so could result in annual hurricane losses up to $7.5 billion, the report said.

Other analysis results include a finding that without a restriction in temperature insured losses from extreme hurricanes could increase by $41-to-$62 billion above present-day losses of $60-to-$85 billion, representing a 70-to-75 percent increase, which the study said is equivalent to an additional two to three Hurricane Andrews in a single season based on 2004 figures.