EAA Web Session: EAA’s 2nd Climate Day: Risks and Opportunities for the Insurance Industry

While the actuarial community works on developing new ways to measure the economic impact of the risk posed by global warming, it is exceedingly important for Actuaries to gain an understanding of the underlying science of climate change. Having discussed the basics of climate science in a dedicated web session in Q4 2020, we are now going to move from climate science to climate models and then focus onto insurance-specific requirements and applications.

To begin with, we show how laws of physics and chemistry can help us build practical climate models dealing with glaciers, rising water level etc. We then discuss how a gap between climate models and actuarial models can be bridged e.g. in order to capture how climate change will impact mortality risk.

Next, we zoom into the insurance context by embarking on a journey through various relevant national and European regulatory requirements. In particular, we examine how insurance companies can take global warming into consideration in their ORSA.

Having discussed several requirements insurers need to comply with, we move on by considering climate change as a unique investment opportunity. After an overview of Net Zero financing needs and key transition drivers, we look into green finance and investment examples covering equity, bonds and alternative asset classes.

Finally, we look into the flood-related climate risk. We discuss several applications of flood and climate modeling as an input to financial models, along with best practices for integrating them with financial models. As an example, we present a case study on flood and climate risk to residential property and mortgage risk in the United States.

Registration deadline: 28 November 2021