Where Home Insurance Meets Climate Change: Making Sense of Climate Risk, Data Uncertainty, and Projections

We present an attribution analysis of residential insurance losses due to noncatastrophic weather events and propose a comprehensive statistical methodology for assessment of future claim dynamics in the face of climate change. We also provide valuable insight into uncertainties of the developed forecasts for claim severities with respect to various climate model projections and greenhouse emission scenarios. The results of our study pave the way for more accurate short- and long-term cost-benefit assessment of climate adaptation in the insurance sector.

Keywords: Climate-related risk management, property damage, forecasting, climate adaptation