The cost of environmental catastrophes is rising

Cloud 9fin

Batten down the hatches, because the cost of environmental damage continues to rise.

Hurricanes and natural disasters pose a threat to leveraged credits. This year’s Atlantic hurricane season, which runs from June to November, has caused significant physical and financial damage to borrowers and civilians located mainly in the southeastern part of the US. Damages from hurricanes Helene and Milton, specifically, are estimated by published reports to be around $50bn each, ranking them among the costliest disasters in recent history.

In this week’s episode of Cloud 9fin hosted by leveraged finance editor David Bell, senior reporter Sasha Padbidri talks to Karen Clark, a Nobel Prize-winning pioneer in the catastrophe modeling space. Clark was also the subject of Michael Lewis’ 2007 article In Nature’s Casino for The New York Times Magazine, which examines the topic of catastrophe modeling in great detail.

Together, they discuss how the technology of catastrophe modeling has advanced since the 1980s and why understanding these risks are critical for company executives and insurers as natural disasters continue to reshape the financial landscape.