ABSTRACT

Traditionally, historical claims have been used for property insurance underwriting, but in a changing climate with new weather regimes the information inherent in such data may no longer be viable for assessing risks. The successful insurance companies of tomorrow are aware of climate change and implement strategies to integrate its risk repercussions with their business operations. Impacts of climate change will penetrate through to sectors beyond insurance, for instance via revised building codes, new products and materials, or economic mobility. There is demand for clever models and algorithms that capture and quantify relevant risks from patterns and correlations in multi-source data including the Internet of Things and social media. Artificial intelligence envisions further layers that produce personalized solutions from un- or semi-supervised decision support systems. A case study on weather-induced water damage to properties in Norway reports municipal increase in aggregate payment between −24% and 102% towards the end of the century. Climate change inducing losses finds its contrast in an emerging acknowledgement among insurance companies that sharing loss data to regulators might contribute climate risk reduction and hence prove beneficial to their own business as well.