A “paradigm shift” in risk assessment methods is needed in the face of increasingly extreme weather events, according to the Geneva Association.

New evidence shows the world’s oceans have warmed significantly, the think tank’s latest report says.

“Given that energy from the ocean is the key driver of extreme events, ocean warming has effectively caused a shift towards a ‘new normal’ for a number of insurance-relevant hazards.”

This shift is “quasi-irreversible”, the association says. Even if greenhouse gas emissions stop tomorrow, ocean temperatures will continue to rise.

“In the non-stationary environment caused by ocean warming, traditional approaches, which are solely based on analysing historical data, increasingly fail to estimate today’s hazard probabilities,” lead author Falk Niehorster said.

“A paradigm shift from historic to predictive risk assessment methods is necessary.

“The report calls for scenario-based approaches and tail-risk modelling to become an essential part of enterprise risk management.”

In some high-threat areas ocean warming and climate change threaten the insurability of catastrophe risk, the report says.

Governments and the private sector must work together to increase community resilience, according to the association.