New research has now been funded to help to quantify the risk associated with hail, tornadoes and wind.
Verisk Analytics company, Atmospheric Environmental Research (AER), has announced that it has received funding from the insurance industry and financial sector companies for a new emerging risk program being run by its scientists, called Climate Change: Tornado and Hail, in order to help to quantify any shifts that have occurred in the severe thunderstorm hazard patterns in Canada and the United States.
It is believed that the result will be a “new normal” and the investors are keen to find out what it is.
The remote sensing, meteorological, and actuarial scientists from AER are working with insurance industry though leaders in order to conduct an expansive historical analysis of hail, thunderstorm wind, and tornadoes, in order to determine whether or not the risks associated with them have changed in their severity or frequency when compared to the past.
The insurance industry will also be receiving information of this nature that is very local within cities.
The research team from AER will be conducting an assessment of whether or not evidence exists for local influences on storm occurrence in various parts of a city. This new study will concentrate mainly on hailstorms and tornadoes, which have the greatest interest to personal and commercial lines insurers in the insurance industry of both Canada and the United States.
According to the managing principal and co-founder of Fermat Capital Management, John Seo, PhD., “Despite the considerable efforts and resources applied by the insurance industry toward fundamental research into emerging risks, there has been and will always be significant gaps between the scientific community and the insurance industry.”
The research program at AER will help the insurance industry to identify the new norm so that new opportunities for risk transfer can be found, and the expansion of the market for securities linked to coverage can be moved beyond the conventional traditions in a more responsible way. The hope is that the data this program provides will give insurers the opportunity to act and plan based on the current reality as opposed to that of a past that is no longer relevant.
