Cost of Climate Change: Risk of Building Loss from Typhoon in South Korea

In recent years, natural disasters and climate abnormalities have increased worldwide. The Fifth Assessment Report (2014) of the Intergovernmental Panel on Climate Change warned of extreme rainfall events, warming and acidification, global mean temperature rises, and average sea level rises. In many countries, changes in weather disaster patterns, such as typhoons and heavy rains, have already led to increased damage to buildings. However, the empirical quantification of typhoon risk and building damage due to climate change is insufficient. The purpose of this study was to quantify the risk of building loss from typhoon pattern change caused by climate change. To this end, the intensity and frequency of typhoons affecting Korea were analyzed to examine typhoon patterns. In addition, typhoon risk was quantified using the Korean typhoon vulnerability function utilized by insurers, reinsurers, and vendors, the major users of catastrophe modeling. Hence, through this study, it is possible to generate various risk management strategies, which can be used by governments when establishing climate change policies and help insurers to improve their business models through climate risk assessment based on reasonable quantitative typhoon damage scenarios.