Request for Proposals - CAS Seeks Research on Innovative Pricing Models for Flood Exposure

Proposal Deadline: July 7, 2025

The Casualty Actuarial Society (CAS) is offering up to $45,000 for a research paper that provides guidance on pricing flood exposure.

Research Problem Description

Flood-inducing weather events, including hurricanes, excessive rainfall, and snowmelt, are increasing in frequency and severity around the world. While mitigation and adaptation measures are being implemented, their impact is difficult to evaluate. Excess rain and snowmelt often cause flooding of lakes and rivers. Urban flooding results from excess rain on continuous or impervious land, insufficient drainage system capacity, and reduced infiltration rates. Meanwhile, sunny day flooding in some low-lying coastal areas has no relationship to rain, is caused by sea level rise, full moon cycles and other factors.

As a result, developing rates for personal and commercial property coverage that accounts for flooding can be challenging. To price coverage precipitating from the tide of rising losses, the Casualty Actuarial Society’s (CAS) Climate and Sustainability Working Group is seeking a research paper that outlines a new or substantively extended practical and well-justified modeling solution for flood events that can be integrated into property insurance pricing.

The research paper should highlight the multiple factors involved in pricing for flood exposure and may address:

• Reliance on alternative data sources;
• Loss cost (including frequency and severity) development studies on flood exposure;
• Portfolio change adjustments such as growth in new geographic areas and increasing exposure in basements;
• The cost of capital for high frequency, lower severity flood events that typically fall below the threshold of most reinsurance catastrophic treaty attachment points; and
• The impact of mitigation or adaptation measures, including:

• Floodwalls around lakes and rivers to protect buildings;
• Upriver diversion canals to redirect excessive water from snowmelt or excessive rain;
• Sump pump or back water valves; and
• Improvement of municipal freshwater drainage systems.

Proposal Requirements

The proposal should outline anew or substantively enhanced practical and well-justified modeling solution for flood events that can be integrated into property insurance pricing.

The model should be:

• Structured and parameterized to accurately reflect potential flood losses;
• Flexible enough to adapt to the evolving nature of these risks over time;
• Easily applicable to a wide range of pricing use cases;
• Rooted in established principles of mathematical statistics, predictive modeling or other established fields with sound mathematical foundations; and
• The model should describe its components and parameters clearly, ensuring that it is understandable to an actuary working in insurance pricing. Extensive familiarity with advanced topics such as construction, engineering, or geoscience should not be required.

Additionally, the model, methods and processes should be explainable to insurance industry decision makers who may not have actuarial or statistical education or experience. Code or sample worksheets should provide easy-to-follow calculations and enable auditing and assumption adjustments. Material model assumptions, limitations, and uncertainties should be clearly communicated and quantified where appropriate.

In addition to a CAS-published research paper, the selected researchers must deliver a two- to three-page executive summary suitable as a blog post or magazine article. This summary should highlight the key takeaways from the paper and be understandable by a non-technical audience.

This paper is a sample of the type of end product the CAS is seeking: Catastrophe Models For Wildfire Mitigation: Quantifying Credits And Benefits to Homeowners and Communities 

Submitting Proposals

Interested researchers should submit a proposal that includes:

• A detailed outline and research approach.

• Labor expenses commensurate with the time required and other out-of-pocket expenses that should not exceed $45,000.
• Resumes of the researcher(s), indicating how their background, education and experience demonstrate their qualifications to perform the research.
• Acknowledgement that authors must report the use of artificial intelligence, if any, while producing research.

Interested parties are welcome to submit questions about the RFP. All questions and responses will be circulated to those respondents who have submitted questions or who have expressed their intent to submit proposals by June 15, 2025 Submit questions and proposals to Olivia Curtis (ocurtis@casact.org), Program Coordinator, and copy to Joyce Warner (jwarner@casact.org ), Chief Business Officer “Pricing Model for Flood Exposure” must be in the subject line. Receipt of proposals will be acknowledged in a timely manner.

A CAS contract will be awarded to the researcher(s) who, in the judgment of the Climate and Sustainability Working Group, can best perform the specified work. If the group determines that no proposal meets the requirements of the RFP, no contract will be awarded.

Presentation, Ownership and Publication of Report

Upon selection, the researcher(s) must sign a formal research agreement that assigns all rights, title, and interests, including copyright and patent rights of the report will be owned by the CAS. In any publication of the report, the researcher(s) will receive appropriate authorship credit.

Authors will be required to upload their final paper electronically in the CAS’s Scholar One system. To aid research adoption, the final work product’s code and data will also be placed in the CAS’s GitHub repository, https://github.com/casact, under the MPL2.0 license. Researcher(s) should make every effort to be available to present the report at a CAS meeting or seminar.

Timeline

About the Actuarial Society (CAS)

The Casualty Actuarial Society (CAS) is a leading international organization for credentialing and professional education. Founded in 1914, the CAS is the world’s only actuarial organization focused exclusively on property and casualty risks and serves over 11,000 members worldwide. CAS members are experts in property and casualty insurance, reinsurance, finance, risk management, and enterprise risk management. Professionals educated by the CAS empower business and government to make well-informed strategic, financial and operational decisions. To expand and enhance the skills of modern actuaries, the CAS supports research in a variety of areas.

About the Climate and Sustainability Working Group

The Climate and Sustainability Working Group addresses actuarial issues related to climate risk and sustainability within the Property-Casualty sector. It is a cross-functional body, providing guidance on climate and sustainability-related research, professional education, and outreach.