AIR’s Climate Change Practice

Explore the sensitivity of your risk profile to the interconnected risk of climate change and extreme events across different sectors.

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AIR Is Helping Organizations Respond to the 2021 Climate Biennial Exploratory Scenarios

AIR's Climate Change Practice is working to help firms satisfy the Bank of England’s 2021 climate biennial exploratory scenarios (CBES) by exploring the financial risks posed by climate change. AIR has relevant experience providing solutions for the General Insurance Stress Test 2019. This exercise tests the resilience of banks’ and insurers' current business models to climate-related hazards to help inform decisions about adjustments that may be needed in the coming decades. For this exercise, AIR prioritized three critical regions and perils (Great Britain inland flood, Japan typhoon, and U.S. hurricane). Our team of experts is prepared to undertake similar studies on a consulting basis for other regions and perils.

A document outlining the methodology, results, and data for this study will be available in July to clients who license AIR models.

Contact AIR’s Climate Change Practice for further details on the 2021 CBES

Climate Change and Extreme Weather

AIR’s atmospheric peril models reflect today’s climate, including sea levels and coastlines; precipitation patterns; and storm intensities and frequencies. As the models are updated, we incorporate the most recent seasons of higher—or lower—activity, as well as changes in exposure, to better reflect the coming year’s risk.

Read Quantifying the Impact from Climate Change on U.S. Hurricane Risk

Climate Change and Agriculture

AIR’s agricultural risk models use historical data and fundamental biological principles to quantify the effects of weather on crop yield. AIR's Climate Change Practice is using climate change scenarios from the fifth version of the Coupled Model Intercomparison Project (CMIP5) and elsewhere to understand likely impacts of climate change and increasing levels of atmospheric CO2 on insured crop losses.

Read Quantifying the Impacts of Climate Change on U.S. Corn Yields

Climate Change and Casualty Lines

Using climate change scenarios from Arium™ (AIR’s casualty accumulation management platform), we calculate and combine the liability losses from each scenario to generate a liability footprint.

Read about Arium’s Sea Level Rise Liability Scenario

Climate Change and Pandemic

We are leveraging the AIR Pandemic Model along with future temperature and precipitation information from the Fifth version of the Coupled Model Intercomparison Project (CMIP5) to simulate the impact of climate change on vector-borne disease risk.

Climate Change and Supply Chains

As part of business sustainability, organizations are looking to future-proof their businesses against climate change. Extreme weather events and sea level rise increase the risk to critical infrastructure that globally interrelated manufacturing and distribution networks rely on. To analyze the impact of climate change on these networks, AIR has developed a supply chain risk model to characterize a range of possible disruption scenarios across the entire value chain. Output can be used to support critical risk mitigation decisions, such as whether to relocate or secure additional insurance placement.

Consulting Services

Our team of climate change scientists collaborate with your company to create customized solutions that help you assess the risk of climate change to different lines of business from property and casualty to life, agriculture, and supply chain.

AIR experts in our Global Resilience Practice and climate change scientists in our Climate Change Practice have helped governments and organizations protect, adapt, and mitigate the risk of sea level rise due to climate change. AIR assisted the City of Miami Beach with their stormwater management plan and developed an algorithm to expand existing storm footprints to account for future elevated sea levels.  

Insights on Climate Change

Thought Leadership

Since our founding, AIR has been focused on providing science-based solutions. We strongly believe that outreach and education can help organizations and governments make data-driven decisions and policies that can help us build climate-resilient communities across the globe. Our scientists and industry experts have built long-term relationships with the state and federal governments, departments of insurance, rating agencies, and regulators around the world.

We have worked with insurance associations to publish reports that quantify the financial/insured risks of climate change and can create climate-conditioned catalogs that enable stress-testing of losses under future climate conditions.

Explore our work with ABI on the impact of climate change on insurance losses for UK windstorms

AIR engages with regulators to help formulate and interpret climate-related and other general insurance stress tests. Recent examples of this type of work include:

Discover AIR's work with PRA on a framework for assessing the financial impacts of physical climate change

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