We asked insurance workers where they'd live in the US to avoid future natural disasters
| There is mounting evidence that climate change influences major events like heat waves, droughts, and heavy rains, which have become more frequent and severe. While recent weather events haven’t prevented home buyers from purchasing property near the coast, insurance professionals are beginning to view natural disasters as a major economic threat. Last year, a survey of nearly 270 risk managers from around the globe identified climate change as today’s top financial risk, behind cyber attacks and terrorism. The survey was conducted shortly after the release of a UN Intergovernmental Panel on Climate Change report, which found that the world’s temperatures could escalate to catastrophic levels by 2040. The resulting damage could trigger a $54 trillion global economic loss and force many people to migrate from their homes. Where can people go to avoid these financial and physical effects of climate change? We put the question to a group of actuaries, who use statistics to determine economic risk. They gave us their picks for the “least risky” cities for effects of climate-related disasters. Many highlighted coastal locations, which they found less vulnerable to extreme temperature changes. Others preferred Midwestern areas, given the escalating concerns about sea-level rise. Most warned against the southeastern coast, where Hurricane Michael wreaked havoc in October 2018. While no area is impervious to disaster, a home in one of these cities could be a relatively safe investment, according to the actuaries. Minneapolis is a safe bet for avoiding floods and hurricanes. To determine climate-based financial risk, many insurance workers turn to the Actuaries Climate Index, a tool for measuring extreme changes in temperature, wind speed, drought levels, precipitation, and sea level. (It’s kind of like the consumer price index for climate change.) The tool is a collaborative effort from four actuarial societies in North America. They plan to release a new index by the end of the year that takes into account vulnerable populations and property. Based on these considerations, Minneapolis qualifies as a “relatively risk-free” city, said Doug Collins, the chair of the Climate Index Working Group. Not only is it less vulnerable to hurricanes and flooding, but its summers also tend to avoid persistent heat. In Portland, Maine, properties aren’t particularly vulnerable to high-tide flooding. “Climate risks are relatively low here,” Collins said of Maine, where he lives. When asked which city in Maine is the least vulnerable, he pointed to Portland, the most populous. Collins said that while Portland might eventually be vulnerable to sea-level rise, these changes would be likely to affect those closest to the water as opposed to the many homes on the western side. His choice is echoed in the research of Kristy Dahl and Astrid Caldas, two senior climatologists at the Union of Concerned Scientists. In studying the number of homes exposed to frequent high-tide flooding, the scientists found that coastal Maine had less property risk compared with most coastal states. Salt Lake City has easy access to water in the event of a drought. Those looking to avoid the more devastating effects of climate change should consider a home near a lake in a mountainous region, said Chandu Patel, a fellow at the Casualty Actuarial Society. Lakes provide access to water in the event of a drought, and a high elevation makes residents less vulnerable to sea-level rise. One community that meets these qualifications is Salt Lake City, a place Collins considered to be relatively low-risk. In September, the city hosted a Global Climate Action Summit. It’s also one of four local governments in Utah to pledge to achieve 100% renewable energy and reduce greenhouse-gas emissions. Chicago is fairly safe from sea level rise. Great Lakes states are often seen as less risky when it comes to climate change, said Rick Gorvett, a staff actuary at CAS, one of the four groups involved in the Actuaries Climate Index. Chicago’s northern location protects it from sea level rise and helps mitigate issues of extreme heat. Its proximity to Lake Michigan may also be useful in times of drought. In 2016, a climate scientist at the University of Chicago dubbed the city “the place to be” when it came to avoiding climate-related disasters. Madison, Wisconsin, has seen fewer extreme weather conditions in recent years. Wisconsin may be known for its cold temperatures, but it’s expected to get warmer in the coming years, according to research from the University of Wisconsin-Madison. Scientists predict that by mid-century, the city’s annual average temperature will increase by 4 to 9 degrees Fahrenheit, while the number of days with subzero temperatures will decrease by two to three weeks. But according to Gorvett, the main concern for Midwestern states isn’t temperature — it’s drought. On this scale, Madison is considered relatively low-risk. Along with other nearby cities, it has witnessed fewer extreme weather conditions over the past 50 or so years. San Diego has some of the best weather in the country. Temperature is one of the most important factors to consider when evaluating climate risk, said Dale Hall, the managing research director at the Society of Actuaries, which also contributed to the Actuaries Climate Index. On this scale, few places compare to San Diego, which has perhaps the most pristine weather of any US city. Researchers predict that by the end of the century, San Diego will gain three more days of mild weather per year. Santa Barbara, California, also has consistent temperatures. Santa Barbara may seem like a strange place to avoid risk, given its history of wildfires, but few cities can compete with its amiable temperatures, Hall said. When it comes to analyzing a disaster, he said, “anything that’s hard to predict has more risk associated with it.” In Santa Barbara’s case, temperatures are fairly consistent year-round. Denver’s geographic location could keep it safe from most natural disasters. All disasters considered, Denver is perhaps the least risky financial choice. In addition to the city’s high elevation, it’s situated far from the coast, making it less vulnerable to sea-level rise. According to Hall, it also demonstrates fewer fluctuations in temperature and is not prone to extreme winds. These conditions also apply to the nearby city of Boulder, which is included among climate scientists’ preferred locations. While both cities will have to contend with drought, each has come up with a plan to monitor water usage and prevent future shortages. Phoenix doesn’t suffer from extreme winds. Though the weather in Phoenix may be stifling at times, its inland location and mountainous terrain are major advantages in fending off sea-level rise. Like Denver, Phoenix also exhibits fairly consistent temperatures and less extreme winds. But there’s one major caveat: The city’s main water sources are drying up, creating conditions for extreme drought. Andrew Ross, a sociologist, dubbed Phoenix “the least sustainable city in the world.” This points to the complicated nature of predicting financial risk, particularly when it comes to climate change. While the Actuaries Climate Index uses temperature as a starting point, followed by four other indicators, there are myriad factors that influence a city’s susceptibility to disaster. In the end, Collins said, “the economic impacts of climate change will affect everyone.” |
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