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Request for Proposals: Determining the Impact of Climate Change on Insurance Risk and the Global Community-Phase I

07/12/2011 —

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Research Project
Request for Proposal

 

Determining the Impact of Climate Change on Insurance Risk and the Global Community-Phase I

  1. BACKGROUND

    As actuaries are skilled in studying and evaluating the uncertainty of future events and their financial consequences, the American Academy of Actuaries, the Canadian Institute of Actuaries, the Casualty Actuarial Society and the Society of Actuaries are partnering on a research project to develop an index to help raise awareness of the potential risks associated with climate change and the risk management implications within North America and globally. The index would highlight important indicators of climate change such as:

    • Hurricane Intensity
    • Arctic Ice Cover
    • Melting of Land-Based Glaciers
    • Wild Fires
    • Floods
    • Droughts
    • Temperature Extremes

    These organizations have established an Index Working Group led by the Climate Change Committee of the Casualty Actuarial Society and are seeking a researcher(s) to help the Committee in developing the index. This RFP is addressed to those individuals knowledgeable in the subject matter and not limited to members of the actuarial profession. A multi-disciplined research team approach of actuaries, scientists, and/or other professionals is also encouraged.

  2. PURPOSE

    The purpose of this project is to educate actuaries, governments, businesses, educators and the public on climate change and its related risks within North America and globally. The index is to be a resource for actuaries and others in developing predictive models for potential climate change related losses or opportunities as well as for risk management strategies. Actuaries might utilize the data and measures of the indicators and index in evaluating the potential risks of climate related changes to their employers. For example, a high index for increased hurricane intensity might indicate the potential for increased property damage, personal injury or death. In addition, the data and index might be useful to the American Academy of Actuaries and others in public policy discussions.

  3. RESEARCH OBJECTIVE

    This is a two-phase study with the overall objective of developing an index of the key climate change indicators and a process for updating the index on a periodic basis. The Climate Change Committee is seeking a researcher(s) for Phase I of the study.

    In Phase I of the project, the researcher(s) will

    1. Review the work that had been completed to date by the Index Working Group in relation to the indicators listed above and develop a list of key indicators to be included in the index which will be finalized in collaboration with the Index Working Group
    2. Perform a literature review of the existing studies on the key climate indicators to identify established climate change indices and methodologies as well as data sources to be used in the development of the index.
    3. Summarize the findings of the literature review in a report that will address at a minimum the following items:
      1. What indices or measures exist for each indicator and how might they be adapted for this project?
      2. What are the historical trends of each indicator and what are the scientific views of future trends/changes?
      3. How might changes in these indicators impact future mortality, morbidity, property and casualty losses, and insurance risks?
      4. What data sources are available for each indicator?
    4. Utilizing the results in 1 and 2 and the research performed by the Index Working Group, develop a strategy for producing the index which will be finalized in collaboration with the Index Working Group.

    Phase II, involves implementing the strategy/methodology developed in Phase I to produce the index.

    As noted above the researcher(s) will work closely with the Index Working Group to meet study objectives. The Index Working Group will provide management, oversight, and direction for the project.

    The American Academy of Actuaries, the Canadian Institute of Actuaries, the Casualty Actuarial Society, and the Society of Actuaries intend to copyright and publish the results of this research. The research will be considered work-for-hire and all rights thereto belong to the American Academy of Actuaries, the Canadian Institute of Actuaries, the Casualty Actuarial Society, and the Society of Actuaries. However, appropriate credit will be given to the researcher(s).

  4. PROPOSAL

    To facilitate the evaluation of proposals, the following information should be submitted:

    1. Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education, and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
    2. An outline of the approach to be used, emphasizing issues that require special consideration. Details should be given regarding the manner in which appropriate published material will be identified, search techniques to be used, collateral material to be consulted, and possible limitations of the review and analysis.
    3. Cost estimates for the research, including computer time, salaries, report preparation, research costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included.

      Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.

    4. A schedule for completion of the research, identifying key dates or time frames for research completion and report submission.
    5. Ideas regarding the form and distribution of the final report, both for immediate release and for permanent reference (e.g., submission to North American Actuarial Journal or other refereed publication).
    6. Other related factors that give evidence of a proposer’s capabilities to perform in a superior fashion should be detailed.
  5. SELECTION PROCESS

    The CAS’ Climate Change Committee (CCC) is responsible for the selection of the proposal to be funded. Input from other knowledgeable individuals also may be sought, but the CCC will make the final decision. The CAS’ Research Manager and the SOA’s Research Actuary will provide staff support. The Index Working Group has been formed by the CCC to oversee the project upon selection of the proposal.

     

  6. QUESTIONS

    Any questions regarding this RFP should be directed by e-mail to: Cheri Widowski, CAS Research Manager, at cwidowski@casact.org.

     

  7. NOTIFICATION OF INTENT TO SUBMIT PROPOSAL

    If you intend to submit a proposal, Please send written notification via email by August 12, 2011 to Cheri Widowski, CAS Research Manager, at cwidowski@casact.org

     

  8. SUBMISSION OF PROPOSAL

    Please e-mail a copy of the proposal to:
    Cheri Widowski at cwidowski@casact.org

    Proposals must be received no later than August 26, 2011. It is anticipated that all researchers who have submitted proposals will be informed of the status of their proposal no later than September 30, 2011.

    Note: Proposals are considered confidential and proprietary.

  9. CONDITIONS

    The American Academy of Actuaries, the Canadian Institute of Actuaries, the Casualty Actuarial Society, and the Society of Actuaries reserve the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available to proceed. The American Academy of Actuaries, the Canadian Institute of Actuaries, the Casualty Actuarial Society, and the Society of Actuaries also reserve the right to redirect the project as is deemed advisable.

    The American Academy of Actuaries, the Canadian Institute of Actuaries, the Casualty Actuarial Society, and the Society of Actuaries intend to copyright and publish the results of this research. The research will be considered work-for-hire and all rights thereto belong to the American Academy of Actuaries, the Canadian Institute of Actuaries, the Casualty Actuarial Society, and the Society of Actuaries. However, appropriate credit will be given to the researcher(s).

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