In 2023, natural catastrophes (nat cats) impacted communities worldwide. Events, such as earthquakes, severe convective storms and catastrophic floods, disrupted project timelines and caused major financial losses for the construction industry. Compounded by record-breaking heatwaves, the urgency for risk management strategies focused on mitigating the effects of a changing climate has never been greater.
In response, construction companies are looking for insights about the climate’s effect on their projects. They are considering the tactical use of risk models to identify and quantify nat cat perils that could affect projects, impact design and construction decisions, as well as inform risk transfer strategies.
Understanding the Differences between Catastrophe and Climate Models
Catastrophe models use historical data to simulate thousands of scientifically probable events and provide a view of loss potential. Climate models, on the other hand, rely on extremely large scales across space and time, bringing global atmospheric and oceanic observations into simulations to show how changing environmental conditions may influence future weather or climate events.