(Image credit: truckservicezcom/Pixabay.)
Karen Clark & Company (Boston) has released Version 3.0 of its US Winter Storm Model, incorporating updated scientific research and enhanced methods for estimating insured losses from cold-weather events.
The model simulates two types of winter storm perils: extratropical cyclones and Arctic air outbreaks. The former includes large low-pressure systems such as Nor’easters, which generate losses primarily through wind and snow or ice accumulation. Arctic outbreaks, by contrast, are driven by high-pressure systems and prolonged sub-freezing temperatures, often resulting in significant freeze-related damage.
Karen Clark, CEO, KCC.
The new version refines how terrain influences storm impacts and adds secondary building characteristics for each sub-peril. These updates are designed to more accurately capture how wind, ice, and freezing temperatures affect different structural features and mitigation measures.
While average annual expected losses from winter storms remain relatively stable, KCC notes that the probability of events causing $20 billion or more in insured losses has increased. The February 2021 Arctic outbreak, which KCC estimates caused nearly $20 billion in losses, is cited as a benchmark example.
“The winter storm peril—while not a solvency threat for major insurers—can produce large losses, as was demonstrated in February of 2021,” says Karen Clark, co-founder and CEO, KCC. “A $30 billion winter storm event would not be a surprise today.”
There is no scientific consensus on how climate change is affecting U.S. winter storm activity, though KCC points to research on Arctic amplification—a phenomenon in which the Arctic warms faster than the global average—as a potential contributor to increased outbreak severity.
The weakening of the polar vortex under these warming conditions may allow frigid Arctic air to reach areas farther south more frequently, raising the risk of unusually severe cold in regions not typically exposed to such conditions.
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