The past month saw two devastating hurricanes. While they both started in the same ocean basin and impacted states across the Southeastern US, their spatial damage profile and source of estimated losses were quite different. 

We anticipate such damage and loss characteristics to continue in the future, and in the absence of new hurricane adaptation measures, we will see greater losses in areas previously less susceptible to hurricane induced damage (such as Asheville). Accounting for 21st century climate conditions becomes central to more accurately estimating losses in the future. 

Calculating loss estimates for present day and future scenarios requires fusion of multiple geospatial datasets with climate scenario-driven climate risk projections. Such modeling will be essential for quantitative workflows for loss estimation, portfolio level risk management, and planning around climate resilience in the future.

Summary

1. Climate Change and Hurricane Behavior: Present day losses from hurricanes are more representative of future climate than historic records due to warming oceans. Today's hurricanes can acquire more energy due to warmer oceans, with storms like Helene becoming more frequent. Warmer water and air also allows for more moisture in the atmosphere. Extreme rainfall events now occur every 7 years in coastal regions compared to much less frequent occurrences in the past.

2. Contrasting Hurricane Impacts: Hurricane Helene caused strong winds and catastrophic rainfall from its interaction with a stalled cold front along the Appalachians; Hurricane Milton weakened somewhat prior to landfall to a weak Category 3 but spawned numerous tornadoes within its outer bands causing severe damage with high winds and storm surges in coastal regions.

3. Challenges in Estimating Losses: Damage estimates for hurricanes like Helene and Milton are complex. Currently, Helene is listed as >$45 Billion, and Milton is listed as >$30Billion. Helene is likely to be higher than Milton. Varied factors leading to damage including high winds and flooding, make accurate assessments difficult and longer to arrive at so soon after the events.

4. Future Damage and Loss Projections: Climate models and risk projections, like Sust Global's, indicate increasing structural damage from future hurricanes, particularly in Florida and Georgia, driven by rising sea surface temperatures and more intense cyclone activity. We can anticipate more events in the near future that reflect warming conditions.  

Hurricane Helene and Hurricane Milton showcased significant differences in both their development and impact. Hurricane Helene formed in the western Caribbean and initially followed a common trajectory toward the North East. While it built up strength over the warm waters, it achieved peak intensity just prior to making landfall. Its effects were mainly heavy rains, storm surges, and strong winds. Helene caused immense damage inland from heavy rainfall, the main source of impact to cities like Asheville. 

In contrast, Hurricane Milton developed in the same ocean basin but followed a much more destructive course. Unlike Helene, Milton maintained high wind speeds as it moved toward populated coastal regions. The storm's high winds, storm surges, elevated tornado activity, and torrential rains caused severe damage to infrastructure and displaced many communities.

How have hurricanes changed behavior?

Today's hurricanes are dramatically different from those of the past, largely due to the increased energy these systems are capable of retaining. Take Hurricane Helene, for example, which formed over the Gulf of Mexico, fueled by record-breaking sea surface temperatures. In the lead-up to its landfall. This frontal system stretched from Atlanta to the southern Appalachians, triggering heavy rainfall and devastating floods in the region even before Helene's core reached the area. 

In our current climate, which has already warmed by 1.3°C, storms like Helene have become more frequent. Warm sea surface temperatures act like fuel to a wind generating engine, giving it the escape velocity to attain Cat 3+ wind speeds. The kind of extreme rainfall it brought now happens roughly once every seven years in coastal areas and once every 70 years inland, compared to far less frequent occurrences in the past [2]. These events underscore how climate change is reshaping not just the intensity of storms but also their far-reaching impacts.

Estimating Hurricane Losses: Demographics meet climate science

The left side of the figure indicates baseline expected damage from historic events. We see that the track from Helene is consistent with a lower estimated damage track as benchmarked by the FEMA National Risk Index (NRI).

Insurance teams have reported that both Helene and Milton are likely to be $50 billion disasters, joining the ranks of the most costly hurricane events [3]. While their estimates have varied significantly, many are still incomplete, reflecting the challenge of gauging the full scope of destruction these storms leave behind.

States like Florida have experienced severe hurricanes in the past decades and have some elements of adaptation measures in place to protect against property damages. However, States like North Carolina have had limited exposure to hurricanes in the past and lack similar adaptation measures, so we would expect these states to be less prepared and incurring greater losses from the effects of hurricanes such as Helene. 

Calculating the full extent of damages from major hurricanes like Milton and Helene is anything but straightforward. The more complex and intense the storms, the longer it takes to fully assess the aftermath. Damage is often widespread, affecting different regions in various ways—high winds devastate some areas, while flooding wreaks havoc in others. Helene, in particular, brought catastrophic flooding to regions that rarely experience such extreme water levels, making the damage from Helene much more unexpected.

The future of hurricanes: What climate models are telling us

Using synthetic hurricane track generators, we can simulate potential hurricane activity under present-day and future ocean conditions. These include present-day sea surface temperature observations and warming scenarios. This is precisely what Sust Global’s cyclone risk projection data product does. Using projections of future sea surface temperatures and sea surface pressure estimates, we can estimate future projections of cyclone wind speed intensities and their exceedance probabilities at a census tract, county, or state level. Using these projections and assuming GDP staying the same across counties in the future, we can estimate forward-looking changes in structural damage from hurricanes and associated events such as riverine and coastal flooding. The results are often unexpected. 

Based on our projections, we estimate multiple counties across Florida and Georgia to experience increasing structural damage from hurricanes, as quantified in the spatial profile (map on the right hand side). The greatest percent change in structural damage is seen across Georgia and the Western of North Carolina (where Ashville is located), largely driven by the historically low baseline risk, representing a dramatic increase in risk. Meanwhile many counties in Florida are projected to see a 3-9% increase in structural damage. Given Florida's sizable GDP, this increase is also significant and noteworthy for risk managers and investors. 

Hurricanes like Helene and Milton, with their hefty economic tolls, can be expected to become more of a regular threat rather than isolated incidents. Data from frontier climate science coupled with geospatial analytics can inform and enable teams across planning, risk management and investment functions to better account for present day risk and better prepare for climate hazards in the future. 

References

[1] National Hurricane Center, NHC, NOAA

[2] Climate change key driver of catastrophic impacts of Hurricane Helene, World Weather Attribution 

[2] Helene and Milton are both likely to be $50 billion disasters, KSBW

Figure Captions:

Left: Baseline damage estimation across counties in Florida, Georgia and Carolinas based on historic hurricanes, coastal floods, and riverine floods from Sust Global’s economic zone-level analysis dataset, benchmarked against the FEMA National Risk Index (NRI) and GDP estimates from the U.S. Bureau of Economic Analysis. Overlaid are the tracks of Hurricane Helene and Hurricane Milton from NHC [1]. Units are in thousands of USD. Estimates are quantile-mapped for clearer visualization.

Right: Visualization of the geospatial distribution of county-level, forward-looking damage projections based on increasing sea surface temperatures based on the SSP5-RCP8.5 climate scenario (IPCC high emissions scenario, aka “hot house world”) and rising cyclone activity over the coming decades. Representation is as a percentage (capped at 150%). Projections are quantile-mapped for clearer visualization.