Environmental Risk Series
Authors
Authors vary by report and include the following individuals: Margaret Conroy, PhD, FCAS, MAAA; Robert Erhardt, PhD ACAS; Max J. Rudolph, FSA, CFA, CERA, MAAA; Natalie Howe, PhD; Therese Klodnicki, ACAS, MAAA; Alexandra Baig, MBA, CFP; Kimberley Ward, FCAS, MAAA, CPCU, ARM; A. Stanley Meiburg, PhD; Beckett Sterner, PhD; Esther Boyle; Ann Kinzig, PhD; Petar Jevtic, PhD.
Description
This report series explores various aspects of environmental risks.
Podcasts
Research Insights - Impact of Climate Change on Investors
Environmental Risk Series
Reports
Municipalities and Climate Change
There are several strategies that cities and regions can take to address the changing climate. Nature-based solutions include building coastal buffers and planting trees. Awareness of the physical risk impact can be built by working with insurers to manage private insurance plans or with government to create risk assessments. Early warning systems can be built, and proactive planning processes developed.
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Impact of Climate Change on Investors
The earth’s ecosystem appears to be leaving the 10,000-year Holocene epoch that featured a stable environment. For homo sapiens, this stability encouraged a move from hunter/gatherer to farming and urban lifestyles. The new period showcases climate risk, resulting in higher temperatures and more extreme weather. These conditions lead to greater exposures to properties and economies when events like hurricanes and wildfires occur.
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Environmental Risk in Crop Insurance
Crop insurance plays an important role in mitigating food production disasters and keeping a robust food production system in the United States. Crop insurance increases stability in food and fiber production, smoothing variability which would otherwise occur because of weather patterns and changes in international trade regulations and markets. Stability increases the ability of farmers to make long-term investments that increase production efficiency and keep productive land in agriculture.
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Emerging Risks in the Health Sector
Climate change has the potential to wreak havoc on ecosystems worldwide. One anticipated repercussion is the change in suitable habitats of vectors, such as mosquitos and ticks, who can transmit serious and even life-threatening diseases to humans. In this report, we outline major vector-borne diseases, discuss their symptoms and treatment costs, and present the relevant research regarding their evolving spatial patterns due to climate change.
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Integrated Assessment Models
Integrated Assessment Models (IAM) combine scientific scenarios that project changes in greenhouse gas (GHG) levels, resulting in global temperature increases and meteorological volatility when GHG increases, with quantitative economic models expanding on an aligned narrative.
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Effects of Pollution and Environmental Degradation on Mortality and Morbidity Rates and Healthcare Costs
Human health is largely dependent on environmental health. This report seeks not to price all ecosystem services but to understand and begin to quantify the functions that promote human health through the increased morbidity and mortality cost in the face of environmental degradation.
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Climate System, A Primer for Actuaries
This paper provides a high-level review of climate models for the actuary and shows they are not impenetrable, intriguing the reader enough to seek out additional resources.
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New Fire Hazard Risk from Policy Responses to Climate Change
The unprecedented losses associated with recent wildfires are yet another call to insurers to understand how climate change is impacting the landscape of fire hazards. In this report, to further advance understanding of relationship between fire hazard and climate change, for both academic and practitioner communities, we review emerging evidence showing that policies surrounding tree planting are increasingly important for fire hazard insurance. Furthermore, we discuss relevant risk factors and potential mechanisms when accounting for these policies.
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Sustainable Insurance: A Changing International and National Landscape
We summarize some of the developments in corporate sustainability. The guiding principles of corporate sustainability are developed on the global stage, but implementation of these principles necessarily occurs at the individual company level.
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Climate Change and Environmental Risks
Climate change is occurring. As a result, insured and uninsured losses are increasing. Billion-dollar (CPI adjusted) disaster events have increased in each decade in which they have been tracked since 1980.
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Environmental Risk from Globalization
Globalization causes insurable loss through disease, crop damage, infrastructure damage, and ecosystem services damage.
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Introduction to Environmental Risk
This report will endeavor to introduce the reader to some of the known and developing environmental risks that impact the business of insurance, with a specific focus on North American risks.
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Acknowledgments
The researchers’ deepest gratitude goes to those without whose efforts this project could not have come to fruition: the Project Oversight Group and others at the Society of Actuaries.
Project Oversight Group members:
Priya Rohatgi, ASA, Chair of Project Oversight Group
Rachit Agarwal, FSA, CERA, FCIA
Mark Alberts, FSA, MAAA
Jessica Chen, ACAS
Margaret Conroy, Ph.D, FCAS, MAAA
Robert Erhardt, PhD, ACAS
Tyler Grossi, ASA
Gabrielle Guzman, FSA, MAAA
Alexander Hoffman, ASA MAAA
Eric Holley, PhD
Petar Jevtic, PhD
Joe Kennedy, FSAI, FIA, MSc, Dip Man
Jiani (Maggie) Ma, FSA, FCIA
Priya Pathak, ASA
Max Rudolph, FSA, CFA, CERA, MAAA
Sze Won Tan, ASA
Robert Zhan, FSA, CERA
Ruobing Zhang, ASA, ACIA, CERA
At the Society of Actuaries:
R. Dale Hall, FSA, CERA, MAAA, Director of Research
Scott Lennox, FSA, FCAS, FCIA, Staff Actuary
Rob Montgomery, ASA, MAAA, Consultant and Research Project Manager
Erika Schulty, Research Associate
Questions Or Comments?
If you have comments or questions, please send an email to research@soa.org.