Canadian Underwriter

Aon’s Bowen gives 2022 NatCat forecast

February 23, 2022   by Philip Porado

Driving on straight dirt road towards the ominous tornado storm through the cultivated fields of wheat and corn crops.

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Canada’s seen US$54 billion in economic losses due to weather events since 2010, Steve Bowen, Aon global head of catastrophe insight, told CatIQ’s Feb. 10 webinar, Catastrophes: Past, Present and Innovative Paths Forward.

“That’s roughly half of all losses over the course of the last 35 years,” he added.

Will 2022 bring more of the same? The short answer is hopefully not, since we’re in a La Niña cycle, which generally conjures less wild weather than an El Niño cycle.

“By the time we get into the second half of the year, it’s very likely we’re going to be staying in neutral conditions,” Bowen said. “So, in terms of hurricane forecasts for those in Atlantic Canada…at this point, we’re not necessarily looking at anything that’s overly concerning when we get to those peak development months in August, September and October.”

Snow might be a different story. Ocean waters near Atlantic Canada have been warmer than normal, Bowen said, and “a lot of that has given fuel to several of these strong nor’easters that we’ve seen over the last couple of weeks.”

These so-called bomb cyclones are really just rapidly intensifying areas of low pressure.

“It really was tracking over this warmer water, which acted as fuel and created more of this difference between temperatures, which really leads to that pressure gradient tightening,” he said of a late-January storm that walloped the U.S. eastern seaboard. “That’s why you saw the very high wind gusts and heavy precipitation – tapping into that more moist environment.”

As for tornadoes, one factor impacting rising loss rates is urban expansion. Bowen said that while we “haven’t necessarily seen any obvious trend of more tornadic activity being recorded,” there are more buildings and other insured property in the areas that get hit.

He added there’s been increased advocacy for building code upgrades aimed at minimizing damage.

“While we can’t necessarily say for certain whether or not tornado activity is going to be on the agenda in 2022,” he said, “it certainly seems inevitable now that we’re seeing more and more tornadoes getting stuff and, unfortunately, leading to more impacts to…property.”