Following a series of costly winter weather losses in Europe and North America, we look at whether recent cold snaps are an anomaly or part of a trend

The snow that caused disruption to sports fans travelling to the Superbowl in Texas this February seemed to put an exclamation mark on a second successive winter of extreme cold and unexpected weather on both sides of the Atlantic.

As well as being deadly and disruptive, the extreme weather has resulted in a big bill for the insurance industry for two years running. This has prompted many to ask whether the cold snaps are an anomaly or a persistent phenomenon triggered by climate change.

Either side of Christmas, severe winter storms, significant amounts of snowfall and gusty winds caused property damage, power shortages and travel chaos down the east coast of north America.

The storms were responsible for collapsed roofs, trees and power lines. Travel chaos followed, with roads beset by vehicle accidents and the cancellation of thousands of flights across the USA.

And this year, a winter storm – one of the largest since the 1950s – affected nearly 100 million people across 30 states. The weather first hit Canada, north-east USA and the Midwest, then travelled further south prompting freeze warnings for eastern Texas and most of Louisiana, with fears that crops and other sensitive vegetation could be killed.

It was a case of déjà vu for some areas, as the US winter of 2009-10 saw unprecedented snowfall along the east coast Interstate 95 corridor, with one-in-100 year snow events occurring multiple times during the same season.

Meanwhile, the UK’s second severe winter in succession arrived ahead of schedule, with the country suffering its coldest December since records began 100 years ago. With heavy snow and overnight temperatures regularly dropping to between 14°F and –4°F, large areas of the transport network ground to a halt.

This followed heavy snow earlier in the year, when the UK was hit by its coldest winter since 1978. In Europe, winter storms are forecast to become less frequent, but more intense.

Super storms

In the US, the 1993 ‘superstorm’ brought record-breaking snowfall, frost, ice, and winds to the eastern third of the country, with total insured losses estimated at $3bn. A 1998 ice storm in New England and southern Canada was responsible for more than $1bn in insured loss.

The winter storms in the USA and Canada in the past two years also caused significant property damage, with an estimated $2bn in average insured loss each year in the USA, and more than $250m in Canada.

Aon Benfield Impact Forecasting meteorologist Steve Bowen says it is too early to put a number on the most recent Midwest storm, but adds: “It will probably be in terms of hundreds of millions rather than billions – which is still rare for winter storms.”

AIR Worldwide estimates that insured losses to residential, commercial and industrial properties from that winter storm could reach $1.4bn. “Business interruption losses are going to take precedence over property claims,” Bowen predicts.

Meanwhile, UK insurers were hit with £1.43bn worth of claims in December. The Association of British Insurers (ABI) says the industry received 467,000 claims during the period, affecting vehicles, homes and businesses.

Of these, 190,000 claims related to property damage at a cost of £900m, with 103,000 stemming from burst pipe damage. A further 278,000 were linked to vehicle damage, costing £530m. Many of these were for low-speed collisions as motorists struggled on icy roads.

The ABI’s director of general insurance and health, Nick Starling, says: “The big freeze highlighted that when bad weather strikes, there is no substitute for insurance. During a similar bout of freezing temperatures the previous winter, insurers paid out £700m in weather-related claim.

“Despite the past couple of winters being costly, insurers will continue to do all they can to ensure that the market remains as competitive as possible for consumers.”

UK insurers have already begun warning that the events will affect earnings. In January, RSA warned that its full-year profits were likely to miss analyst forecasts after it suffered a spike in claims caused by severe winter weather across its global businesses.

The group said operating profits were likely to fall by between £600m and £630m because there were £142m more weather-related claims in November and December than usual.

Causes and effect

So, what has caused two such extreme winters to occur one after the other?

“These things do happen,” says Aon Benfield’s Bowen. “This year has been a bit of an anomaly in the USA because we are in a La Niña phase (when the surface temperature across parts of the Pacific drops by 35–40°F). Typically, we would see less frequent coastal storms and less precipitation in the Midwest.

“This has been a big news item because of the frequency and severity of adverse weather,” Bowen says.

“It is extremely challenging to predict a trend based on just a couple of seasons’ activity,” says AIR Worldwide assistant vice-president and director of atmospheric science Peter Dailey. “We are, of course, interested in understanding how climate has influenced those seasons, but it should be studied within the context of the full historical record.”

“The past couple of winter seasons do not indicate a trend, because from a statistical point of view, just two years is insufficient to draw such a conclusion. The fact is, warm temperature records are being broken more often than cold temperature records worldwide.”

“Models are fundamentally data-dependent and thus the more data that’s available, the better models are able to make estimates of future risk predictions.”

Indeed, in the short term, the fact that one such cold winter has followed another could be down to a phenomenon known as “autocorrelation”.

“We found that in the early 1990s if you had one warmer, wetter winter, another tended to follow,” says Risk Management Solutions chief research officer Robert Muir-Wood.

To the extreme

Even if it is too early to talk about trends, the extreme cold does fit into wider climate and weather patterns that brought floods to Australia this year and Pakistan last year, as well as a heat wave to Russia. According to the National Oceanic and Atmospheric Administration, 2010 and 2005 were the warmest years on record globally.

“We can’t exactly say what has triggered it,” says senior climate change adviser in the risk management unit of Swiss Re, Andreas Spiegel. “We have seen quite a few freak events around the world in the past few years. It fits with the predictions made by the Intergovernmental Panel on Climate Change.

“We are seeing a warming effect globally, but in some places it could mean more cold. We could see places further north such as the UK and Scandinavia getting colder winters and warmer summers.”

“In general we expected winters to be warmer, wetter and windier, so this was a bit of a surprise,” adds Muir-Wood. “In the long run, this is a bit unusual. In the UK you can expect more snow, but not necessarily more cold, because the seas around the UK are getting warmer.”

He explains that this is called “lake-effect snow”. “In Asia, they have had more snow as the sea temperatures have gotten warmer,” he says. “In New York state, the city of Buffalo is close to two of the Great Lakes and it gets huge quantities of snow early in the winter when the lake water is warmer, but as the weather gets colder and the lakes freeze over, the snow stops.”

However, this only explains some localised increase in snow. With global temperatures changing, storms, floods and other freak weather conditions will likely become more severe and more frequent, too.

“While most people think that climate change means everything is warming up, some studies also indicate that extremes are becoming more common – more frequent extremes in temperature and in precipitation,” says Dailey. “More extreme temperatures will lead to more extreme weather conditions. A series of very cold, wet winters is by no means at odds with climate science.”

Cold comfort

Although winter weather is unpredictable and costly for the insurance industry, action can be taken to keep nasty surprises, and thus losses, to a minimum.

In order to prevent damage from these extreme conditions, Dailey says it is important for weather forecasters to understand the precursors of a severe winter several months in advance. “These will include a combination of climate-related and weather-related warning signs,” he says.

Spiegel at Swiss Re says: “Up to 60% of losses could be avoided if adaptation measures were taken.”

The United Nations estimates that, by 2030, the world should be spending an additional $36bn-$135bn each year on adaptation measures, include zoning, tougher building codes and building smarter, to address the effects of climate change.

As more lives and properties are put at risk, these measures are rapidly becoming a priority. GR