MS Amlin warns US hurricane losses could surge 50% with 2°C global warming scenario

Insured losses from US hurricanes could rise by nearly 50% under a 2°C global warming scenario, according to a new study from MS Amlin, which warns of a deepening imbalance between climate risk and insurance pricing.

The peer-reviewed research, published in the Journal of Catastrophe Risk and Resilience, highlights how climate change is transforming the geography, frequency, and severity of US hurricane losses.

Northeastern cities historically spared from major storms could see some of the sharpest increases in exposure, the study warns.

The findings come as US insurers increasingly confront a growing divergence between escalating risk and the adequacy of pricing and coverage.

New York is projected to see insured losses rise by 64%, while Rhode Island and Massachusetts could experience increases of more than 70% in average annual losses. Florida, already one of the most exposed states, may face a 44% increase in absolute terms.

The report also warns that stronger hurricanes will become more frequent. Category 4 and 5 storms, with wind speeds over 130mph, are expected to maintain their strength further north due to warming sea surface temperatures.

In major storm years, insured losses in the Carolinas could rise by 60%—three times the projected increase for Texas.

A repeat of the 2022 hurricane season, which cost the industry $62bn, could exceed $90bn in insured losses under the warming scenario.

Andrew Carrier, chief executive of MS Amlin, said the insurance industry is facing “an intensifying mismatch between risk exposure and pricing adequacy”.

“The evidence is mounting – risk appears to be rising faster than recognition or response,” said Carrier.

“While this study points to a need for stronger building codes along the US Northeast and mid-Atlantic coast, aligned with hurricane-prone regions like Florida and Louisiana, at the same time, there seems to be a widening gap between risk and readiness.”

He added: “Asymmetry in the market is becoming more pronounced. Climate-related losses are rising, yet pricing and coverage terms are failing to keep pace. Insurers can act as climate shock absorbers for society—but only if risks are priced and structured in line with today’s reality.”

Dr Sam Phibbs, MS Amlin’s head of catastrophe research and co-author of the study, said the findings highlight a shift in risk towards regions less prepared for hurricane damage.

“Our research shows that major storms could increasingly impact cities that have historically seen few hurricanes,” said Phibbs.

“Warmer oceans will allow hurricanes to maintain their intensity further north and will push significant new risk into areas less prepared to absorb it.”

He also cautioned that the projected 50% increase in losses may understate the full extent of future risks.

“Sea level rise, urban growth, and more intense rainfall could all amplify the scale of insured losses well beyond what’s modelled in this scenario,” Phibbs said.

The report, titled The impact of climate change on hurricane wind losses in the U.S., was authored by MS Amlin’s catastrophe research team in collaboration with external scientists.

It adds to a growing body of research urging reform in building codes, pricing structures, and public awareness to ensure financial resilience in the face of escalating climate risks.