Atmospheric and Environmental Research (AER), a Verisk Analytics company, announced that its scientists have begun a new emerging risk research program entitled, Climate Change: Tornado and Hail, to quantify any shifts in the patterns of hazard related to severe thunderstorms in North America.
According to a release, the initiative is co-sponsored by a group of insurance industry and financial sector companies.
AER said its meteorological, remote sensing, and actuarial scientists are teaming with industry thought leaders to conduct a historical analysis of thunderstorm wind, hail, and tornadoes to determine whether those perils are exhibiting a different frequency or severity than in the past. The AER research team is also assessing whether there is evidence of local influences on storm occurrence within different parts of a city. The AER Emerging Risk research study will focus primarily on tornadoes and hailstorms, which are of high interest to commercial lines and personal lines insurers in both the U.S. and Canada.
"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," said John Seo, PhD, co-founder and managing principal, Fermat Capital Management. "AER has the technical expertise, the industry knowledge and, just as important, the operating model to close such gaps. Our particular motivation for participating in AER's Emerging Risk research program is to enable us to identify new risk transfer opportunities and expand the insurance-linked securities market beyond conventional risks in a responsible way."
"Commercial and personal lines insurers and associated industries need better quantification of the changing landscape of tornado, wind, and hail risk," said Julie Rochman, president and CEO of the Insurance Institute for Business & Home Safety (IBHS). "IBHS's mission is to conduct objective, scientific research to promote effective actions that strengthen businesses and homes against severe storms, and AER's research reinforces that objective by helping us understand the new normal, why these numbers are shifting and where they are trending."
The Climate Change: Tornado and Hail research program is the second project in the Emerging Risk research program managed by AER for the insurance industry. AER's scientists develop actionable data through original research that is conducted in-house, leveraging its extensive data warehouses and broad range of scientific experts. The first research initiative, which was summarized in a report published by Lloyd's of London and co-authored by AER scientists, assessed the risk of covered loss due to widespread, long-duration power outages and resulted in a catalog of space weather blackout scenarios for the United States.
Atmospheric and Environmental Research helps businesses and the government anticipate and manage climate- and weather-related risks.
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