October 31st, 2012

A 2012/13 Winter Climate Perspective

Posted at 1:00 AM ET

James Waller, PhD, Research Meteorologist

In recent weeks there has been considerable media attention towards a developing El-Niño climate pattern and the summer’s record low polar sea-ice. Naturally, these developments raise questions from insurers that want to know how climate works to influence their portfolio results.

On average, U.S. winter storms result in more than USD1 billion of insured loss each year due to roof collapse, business disruption and transportation interruption. Winter climate involves many factors, including the North Atlantic Oscillation (NAO), El-Niño, and the Pacific Decadal Oscillation (PDO).

The U.S. snowstorms of 2010, one of the costliest winter seasons of the last 20 years, happened during a negative phase of the NAO, which allowed arctic air to meet warm maritime air along the east coast. A series of storms developed along this boundary, bringing incredible snowfall amounts to the eastern seaboard. While the NAO cannot be predicted on a daily basis, a recent study by Jaiser and Dethloff (2011) found an association between reduced sea-ice cover and a negative NAO tendency. With this summer’s record-low sea ice extent, the NAO could well remain in a negative phase for longer periods of time, enabling more winter storms along the eastern seaboard.

El Niño is informally known as warming of the east equatorial Pacific waters, causing displacement of typical storm paths and climate disruptions worldwide. While equatorial east Pacific Ocean temperatures have slowly increased in recent months, they have not done so consistently and have yet to meet the threshold of an El-Niño condition. More importantly, global wind patterns typically found with El Niño have yet to appear, indicating that we are still in a neutral phase. However, according to the National Oceanic and Atmospheric Administration (NOAA) Climate Prediction Center (CPC), global forecast models favor a weak El Niño in the coming months. A weak El Niño (if it appears) would mean a more intermittent and less severe response, and hopefully diminished impacts that would also be further modified by the present cold phase PDO.

For North America, these factors suggest a warmer winter for much of the west. The northwest and northern plains should be dry, worsening the current drought situation, with possible implications for next summer’s fire season. Meanwhile, the south should see a wet, cool winter, particularly for the Gulf Coastal states. A weak El-Niño could increase the risk for flooding for these areas including Florida, with possibly elevated tornado frequency.

While the Great Lakes enjoyed a mild and dry winter last year, these regions may not be so lucky this winter. A study by Rodionov and Assel (2003) found that for weak El Niño winters under a cold PDO, snowstorms and cold-air outbreaks can appear more frequently in the Great Lakes.

The last winters with a similar climate profile were 1977 and 1978, which resulted in extremely cold Januaries for the Great Lakes and the 1978 Cleveland “Superbomb,” which brought excessive snowfall and cold to most of the Great Lakes, Midwest, and Northeast.

History shows that El Niño is associated with diminished tropical activity. However, none of the global models indicate an El Niño lasting into next summer, so it is premature to surmise whether U.S. hurricane landfalls could be diminished for a fifth straight year.

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Guy Carpenter & Company, LLC provides this material for general information only. The information contained herein is based on sources we believe reliable, but we do not guarantee its accuracy, and it should be understood to be general insurance/reinsurance information only. Guy Carpenter & Company, LLC makes no representations or warranties, express or implied. The information is not intended to be taken as advice with respect to any individual situation and cannot be relied upon as such. 

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