Critical Gulf Coast ports that supply around 18 per cent of the world’s liquefied natural gas, including to Bermuda, could be mostly underwater in 25 years.

Sarah Kapnick, global head of climate advisory at JP Morgan, said ports in the region are projected to experience a sea level rise of between 20 and 40 centimetres by 2050.

She told the ILS Bermuda Convergence conference that Texas ports such as Galveston and Houston are already seeing one or two days of flooding per month.

“In another 20 years, these ports are expected to be underwater between 120 and 250 days a year,” she said.

After Hurricane Ike caused $2.4 billion in damage to Texas in 2008, a study found that $57 billion was needed to prevent further hurricane disruption such as storm surge.

“The money has not started to flow yet,” Dr Kapnick said. “It would take 20 years to actually do the construction to lower that damage risk. If there is no investment in resilience in this location it will be submerged for the majority of the year.”

Dr Kapnick said $100 million in loss per year is expected for the Gulf Coast because of extreme weather and climate events.

She said much depends on how much adaptation takes place in the next two decades.

“If you identify physical risk of drought, wildfire or sea level rise you can then identify the impact of that,” she said. “Then you create solutions.”

She said there are a lot of start-ups being funded around climate technology.

“You can either start investing in the solutions to reduce that exposure or move to insurance for risk transfer,” she said.

Dr Kapnick finds many firms are slow to move to adaptation, preferring to use insurance to mitigate risk.

While some corporations are quick to move to adaptation, particularly those in the utilities sector, the majority of boards she talks with are either cautious adaptors or procrastinators.

“Procrastinators want to wait until something tells them to adapt,” she said. “Either they wait and then they do it, or they wait until an event happens and they have a loss event.”

For now, she foresees growth in the insurance industry and interest in trying to figure out insurance solutions.

“We have major drivers that are impacting the insurance-linked securities market,” she said. “I do not see them going away. I think we are going to have new information coming out of the Federal Emergency Management Agency that we should all be watching for.”

She said we know what the risks of climate change are, but we are not necessarily spending on them.

“As a result there is going to be growing demand for insurance-linked securities and for insurance and for figuring out new solutions,” she said. “It is a matter of seeking out and seeing where those opportunities are.”

Dr Kapnick served as the National Oceanic and Atmospheric Administration’s chief scientist for almost two years.

The conference at the Hamilton Princess & Beach Club continues tomorrow.