What is it about?
Defines a climate index that combines information from 6 important weather variables from the historical records of Spain and Portugal. The perspective is to use it in actuarial applications to measure the impact of climate change on society and the economy, in general, and on the insurance industry in particular.
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Why is it important?
Climate change is defined as a long-term shift in climate patterns affecting the planet globally. The main consequences of climate change are a rise in average temperatures in many regions, and an increase in the frequency and intensity of extreme weather events, such as floods, droughts, storms, or hurricanes. Climate change is associated also with a rise in sea levels, more frequent and severe wildfires, a loss of biodiversity, and many other disruptions with serious economic impacts.
Perspectives
These new climate risks are increasingly affecting both the frequency and severity of claims in different insurance branches. To help insurance companies predict and manage these new risks, actuaries have defined the Actuaries Climate Index™ (ACI), which combines information from several important weather variables from historical records of the United States and Canada. The ACI shows a significant increasing trend over the years. It is important to note, however, that the impact of climate change is not the same in all parts of the planet: different regions and countries are affected in different ways. Therefore, it is important to check if the ACI is as useful to assess climate risk outside the United States and Canada. In this paper, we follow the North American ACI methodology in order to build an actuarial climate index for the Iberian Peninsula, which we call Iberian Actuarial Climate Index (IACI). With it, studies the impact of climate change in the Iberian Peninsula.
Distinguished Professor Emeritus Jose Garrido
Concordia University
Read the Original
This page is a summary of: On the definition of an actuarial climate index for the Iberian peninsula, Anales del Instituto de Actuarios Españoles, December 2023, Instituto de Actuarios Españoles,
DOI: 10.26360/2023_3.
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