View Proposal

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Proposer

George Tzougas

Title

Assessing the Impact of Climate Change on Insurance Claims Using Advanced Statistical Approaches

Goal

Description

Climate change-induced weather hazards are significantly straining property insurance, resulting in extensive damage and substantial claims, particularly in vulnerable regions. A recent report by the European Insurance and Occupational Pensions Authority (EIOPA) reveals that many non-life insurance businesses adjust their pricing annually based on recent events to implicitly consider climate change, given their short-term contract duration. However, as the report also highlights, this approach may have detrimental consequences. Specifically, the sector requires foresight to understand the im-pact of climate change, anticipate higher premiums, prioritize adaptation and mitigation measures, and continuously monitor trends for informed decision-making. Government interventions to share the premium burden are particularly crucial, especially for economically disadvantaged policyholders, to ensure equitable access to insurance and enhance overall societal resilience against climate risks. This project will enhance conventional regression models by incorporating advanced statistical techniques to develop more accurate climate-related claim frequency and severity models for the property insurance market. Unlike traditional models, which often overlook detailed risk factors, our approach will include specific property and content risks while exploring their complex interactions with weather-related hazards. This integration is expected to improve the prediction accuracy of claim numbers and costs, providing a more robust framework for managing the increasing risks associated with climate change and offering greater adaptability to evolving conditions. The proposed approach is expected to significantly enhance predictive performance, enabling actuaries to ensure that premiums accurately reflect the evolving weather-related risks.

Resources

Background

Url

Difficulty Level

Easy

Ethical Approval

None

Number Of Students

0

Supervisor

George Tzougas

Keywords

Degrees