Analysis and evaluation of the economic impacts of extreme atmospheric conditions

In recent years the quantity and frequency of extreme atmospheric events has dramatically increased with devastating effects on the environment and the economy. To this end, to protect against the economic damage caused by these extreme events we need to expand our predictive analysis expertise, including our capacity to manage huge amounts of data.
Indexes are created in order to provide analytical tools on climate change and on possible catastrophic impacts; these indexes may be used by public entities, firms and policymakers to establish common and shared benchmarks to analyse, forecast and evaluate the financial damage caused by extreme climate events.

Goals

Research is based on the definition of indexes to evaluate and simulate the risks linked to extreme weather events. In particular, the Actuaries Climate Index® (ACI) is a tool created to inform actuaries, policymakers and public and private entities in general about current changes in magnitude and/or the frequency of extreme (temperature, rain, wind) or high-impact (sea level) atmospheric events. There is currently a version of the ACI Index for North America (US and Canada) and a slightly different version of the same index for Australia.
This tool is usually used together with the Actuaries Climate Risk Index, which is used to forecast the potential risk management implications of the variations given by ACI and is based on the correlation, according to historical data, between ACI and related economic losses, deaths and injuries. These versions are configured for geomorphological, climatic and economic situations outlined for those specific contexts.
A working version of the ACI is not currently available for Europe. The primary goal of the research is therefore to define suitable indexes for use in the geographical, physical, climatic and economic context of Europe.

Expected results

Thanks to this project, IFAB will acquire the European Climate Index, which will be used by different economic agents (Insurance companies, Reinsurance companies, Financial Groups, Groups working in the Energy field) to define evaluation strategies and Climate Risk coverage, bringing an economic and social advantage to the entire local, National and European system.

Partners

  • CMCC Euro-Mediterranean Centre on Climate Change
  • Leithà

For further information, please contact: [email protected]

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