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Climate change and the Insurance Industry

Objective

Recent documents from the Intergovernmental Panel on Climate Change and the UK Stern Review, have argued cogently that governments, industry and agencies should urgently address the scientific, economic and social implications of climate. The insurance industry must start adapting in response to weather and climate risks. Climate and weather forecasting hosts a wide range of scientific and mathematical methods with a heavy computational base. Insurance mathematics is a rich field, developing advanced stochastic and statistical methods within risk theory. The main objective is to bring statisticians, insurance and climate experts together to build a methodological basis for the emerging field of climate change insurance risk. Statistics is a critical part of the project. We will access insurance data from partners and agencies as well as the huge amount of actual and simulated weather and climate data. This gives us the potential to build models and methods of real relevance to decision making in the insurance industry and help inform government and regulators. Work packages include: (i) early warning of losses, (ii) interpretation of climate modelling for risk analysis, (iii) rain and wind losses, (iv) sea temperature risk (v) concurrent causes for increased loss. A range of mathematical and statistical methods will form the bedrock for the project. They include methods from probabilistic risk theory such as extreme events, methods from climate simulation, especially ensemble simulations, statistical methods such as time series and space-time models and methods from structural and system reliability. The project will attach special importance to training and dissemination. Training is critical in a multidisciplinary project as this. Dissemination is a duty imposed by the urgency of the subject and the newness of the climate change insurance risk field. Partners are in Oslo and London: Norwegian Computing Centre, London School of Economics, Lloyd’s, Gjensidige.

Field of science

  • /natural sciences/earth and related environmental sciences/atmospheric sciences/climatology/climatic changes
  • /social sciences/economics and business/economics

Call for proposal

FP7-PEOPLE-2007-3-1-IAPP
See other projects for this call

Funding Scheme

MC-IAPP - Industry-Academia Partnerships and Pathways (IAPP)

Coordinator

NORSK REGNESENTRAL
Address
Gaustadalleen 23 A
0314 Oslo
Norway
Activity type
Research Organisations
EU contribution
€ 299 901
Administrative Contact
Lars Holden (Dr.)

Participants (3)

LONDON SCHOOL OF ECONOMICS AND POLITICAL SCIENCE
United Kingdom
EU contribution
€ 294 882
Address
Houghton Street 1
WC2A 2AE London
Activity type
Higher or Secondary Education Establishments
Administrative Contact
Bhimla Dheermojee (Ms.)
Corporation of Lloyd's
United Kingdom
EU contribution
€ 107 387
Address
One Lime Street
EC3M7HA London
Activity type
Private for-profit entities (excluding Higher or Secondary Education Establishments)
Administrative Contact
Trevor Maynard (Mr.)
Gjensidige Forsikring
Norway
EU contribution
€ 225 805
Address
Drammensveien 288
1326 Oslo
Activity type
Private for-profit entities (excluding Higher or Secondary Education Establishments)
Administrative Contact
Elisabeth Nyeggen (Mrs.)