It’s
pretty simple, those probabilities are based on historical storm
instances, but as global sea temperatures have risen, it makes the
likelihood of major storms higher.
According
to NOAA July was the hottest July on record. The mid-Atlantic where the
US south east storms gain force was also significantly above average.
So
any pricing model based on historical datasets might underestimate the future
level and frequency of reinsured losses from major US hurricanes.
For
UCITS funds that have a 25-40% risk concentration exposure to US
windstorms; this raises additional questions over risk concentration,
risk/ reward disclosures to investors and liquidity/ pricing of impaired
bonds in the Sept-October period.
https://www.ncei.noaa.gov/news/global-climate-201907
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