Insured losses from US hurricanes could rise by nearly 50% if global temperatures rise by 2°C, according to a recent study by MS Amlin, the Lloyd’s global insurer and reinsurer.
At the same time, regions along the northeastern US coastline, which historically have seen less frequent hurricane damage are now projected to face some of the most pronounced increases in risk, with cities like New York and Boston anticipated to experience some of the steepest relative growth in insured losses.
“The findings come as the industry grapples with an intensifying mismatch between risk exposure and pricing adequacy – a gap that MS Amlin cautions could leave communities underprepared for the financial fallout of future storms,” MS Amlin said.
The study highlights that New York may see insured hurricane losses rise by 64%, while both Rhode Island and Massachusetts could potentially face average annual loss increases of over 70%.
Moreover, Florida, a state that is heavily recognised for its hurricane activity, is expected to experience the largest absolute rise in insured losses, with projections pointing to a 44% increase.
MS Amlin’s research also suggests that category 4 and 5 hurricanes with winds exceeding 130mph, are likely to become more frequent and retain their strength farther north, driven by rising ocean temperatures.
In major hurricane years, states like North and South Carolina could see insured losses spike by as much as 60%, a rate that is three times higher than projected increases in Texas.
The study also notes that if a hurricane season, similar to that of 2022’s, which caused $62 billion in insured damages, were to occur under this warming scenario, losses could potentially end up surpassing $90 billion.
The publication of the report follows MS Amlin CEO, Andrew Carrier’s recent appearance on a global panel discussing climate resilience in the insurance sector, where he highlighted the stark reality of the increasing imbalance between risk and pricing.
“The evidence is mounting – risk appears to be rising faster than recognition or response. While this study points to a need for stronger building codes along the U.S. 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,” Carrier said.
Adding: “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, co-author of the study and MS Amlin’s Head of Catastrophe Research, commented: “Our research shows that major storms could increasingly impact cities that have historically seen few hurricanes. Warmer oceans will allow hurricanes to maintain their intensity further north and will push significant new risk into areas less prepared to absorb it.”
Furthermore, Phibbs warned that the projected 50% increase in insured hurricane losses likely underestimates the full impact of the threat. Once additional factors have been taken into account, such as sea level rise, urban expansion, and heavier rainfall, the financial toll could be much higher.
