The risk of a catastrophic Category 4 hurricane affecting Bermuda is today considered more likely, according to a leading Bermudian meteorologist.

Dr Mark Guishard, chief operating officer of Bermuda Institute of Ocean Sciences, told The Royal Gazette: “Twenty years ago, if you asked me about it, I would have said ‘maybe, maybe not’. Today, I would say there is absolutely a chance we will see a Category 4 hurricane coming close enough to cause concern.”

A Category 4 hurricane can cause widespread damage with winds of 130 to 156mph. Category 3 Hurricane Fabian in August 2003 is considered the most damaging storm to hit Bermuda, so far.

Speaking after a panel on climate change at the Bermuda Risk Summit at the Hamilton Princess & Beach Club on Wednesday, Dr Guishard said: “We have seen the number of hurricanes coming in range of us, and their intensity, gradually going up. We are also on track for about a foot of sea level rise in the next 20 years. That is crazy.”

Panellist Liz Henderson, focused on the United States, said extreme heat caused by climate change was more of a worry for her than a high-velocity hurricane.

The 2023 Texas summer was the second hottest on record and included more than 47 days at or above 100 degrees Fahrenheit.

“How do you protect critical infrastructure around extreme heat, when tarmacs are literally melting?” she said.

Dr Guishard was recently in an office at Arizona State University in Tempe, Arizona when he noticed the air conditioning was not working.

“It had packed it in because it was not rated to handle heat of 115F or more,” he said.

Phoenix, Arizona hit 110F for a record 57 days in 2023.

Dr Guishard said Bermuda does not have the same level of heat.

“The ocean actually moderates our temperature and absorbs a lot of our greenhouse gases,” he said.

We have, however, seen significant warming in the waters around us.

“In recent years, we have seen sea temperatures increase by 2.2F,” he said. “Taken in isolation that might not mean a lot, but the added water vapour in the air combined with ocean heat fuels hurricane activity.”

Ms Henderson said in the last year she has seen an increasing need for innovation in the insurance space to unlock capital. She said when you link the direct buyer at the project level to data analytics and risk capital knowledge, you can create solutions.

“For example, in the United States, solar is a growing industry,” she said. “Project finance around solar and the Inflation Reduction Act of 2022 created tons of tax incentives for people to invest in commercial solar.”

She said most of the solar farms that have been developed over the last three to five years are in Texas, where there is a lot of sunshine, but also frequent hail storms. Hail can damage solar equipment.

“However, solar project developers did not really know how to model the risk of hail,” she said. “They looked at three-year averages for different counties and picked a spot for a solar farm based on that.”

Three years of data was not nearly enough to make a decision like that. Aon is now developing ways to model the hail threat to solar panels.

Ms Henderson said the conversation around climate change has shifted in the last three years.

“Back then people accepted climate change, but they were asking questions about what it meant and how it could be modelled,” she said. “Large institutions have now gotten their heads around that, and are asking how they can solve the problem, or play a role in its solution.”

Ricardo Lara, Insurance Commissioner of California Department of Insurance said insurance can be used to promote better behaviour.

“Insurance plays that critical role to incentivise how we are building,” Mr Lara said. “Insurance pays a critical role in helping us understand climate risk, and communicate it. Mother Nature is forcing us to be critical and creative with how we move forward.”

Ralf Kuerzdoerfer, deputy director of supervision at the Bermuda Monetary Authority, said: “Well understood risks provide opportunities”.