Economic Impact of Increasing Severe Weather Events and Climate Trends

Background and Purpose

Shifts in weather patterns and changes in the environment as a result of climate change are getting a lot of attention.  In the news, in public policy discussions, and in the insurance and other market places.  Actuaries have a role to strategically plan for, to examine, and quantify the impact of these trends.  A better understanding of the costs associated with varying degrees of future scenarios will allow for planning and mitigation efforts by constituents who are impacted and who can play a role in planning for the future.

Research Objective

The SOA’s Catastrophe and Climate Strategic Research Program Steering Committee (CCPSC) is seeking a researcher or a team of researchers to perform a study under defined future scenarios, discuss the implications on affected parties and quantify the costs associated with changing severe weather events.

The steps necessary to accomplish this are:

  • The researchers will perform a literature review and provide background information on the economic costs associated with the severe weather events.
  • Using the information from step 1, the researchers will talk qualitatively about what impact changing weather trends may have to risk owners, mitigators (for example, insurers), or public policy (for example, the National Flood Insurance Program) – then convert to a quantitative assessment of the impacts.
  • The researchers will incorporate the findings of the study into a report to be made available on the Society of Actuaries website that discusses the importance of these findings. The report should include the data and methodologies used to describe the economic impact associated with severe weather events.

The following are examples of proposed topics that could be addressed and are not meant to be exhaustive:

  • Regions
    • United States
    • United States plus at least one other country (for example, The Netherlands or Canada)
  • Perils
    • Multiple or individual perils could be studied. We would not exclude a focused study that went into more depth (e.g., coastal inundation and inland flooding), “or” a broader study that covered a wider area
  • Scenarios
    • IPCC Scenarios: A specific RCP Scenario used as a base as well as proposed comparative impacts against other RCP scenarios
  • Economic impacts
    • Property losses
    • Mortality and disease impacts
    • Tax base impacts
    • Burden on infrastructure, construction
    • Mass installation of air conditioning

Researchers can choose between proposing one peril in depth, or multiple perils more broadly.  Please propose what you would work on and include your reasons for doing so.

The study should ideally quantify the impact of the scenarios on the types of economic losses that result.  We would like for the study to lay out a process, and to the extent feasible, use the process to extend qualitative analysis to quantify impacts and/or discuss limitations.

In your proposal, please discuss your approach as well as the data that you would use and why this would lead to a relevant analysis of these costs in terms of net losses to the public relative to a base scenario.

Proposal

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

  1. Please limit proposals to 5 pages (exclusive of resumes and citations).
  2. Please include a brief summary of the project, including the research question.
  3. 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.
  4. An outline of the approach to be used (e.g. literature search, model, etc.), emphasizing issues that require special consideration. Details should be given regarding the techniques to be used, collateral material to be consulted, and possible limitations of the analysis. It should be indicated how this research will stand out from other research.
  5. A description of the expected deliverables and any supporting data, tools or other resources.
  6. Cost estimates for the research, including computer time, salaries, report preparation, material 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.
  7. A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions. The SOA CCPSC is interested in completing this project in a timely manner.  Suggestions in the proposal for ensuring timely delivery, such as fee adjustments, are encouraged.
  8. Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.

Selection Process

The CCPSC will appoint a Project Oversight Group (POG) to oversee the project.  The CCPSC is responsible for recommending the proposal to be funded.  Input from other knowledgeable individuals also may be sought, but the CCPSC will make the final recommendation, subject to SOA leadership approval. The SOA's Research Project Manager will provide staff actuarial support.

Questions

Any questions regarding this RFP should be directed to Rob Montgomery, SOA Research Project Manager (phone: 740-258-2977; email:  rmontgomery@soa.org.    

Notification Of Intent To Submit Proposal

If you intend to submit a proposal, please e-mail written notification by January 8, 2020, to Erika Schulty; email: ESchulty@soa.org.

Submission Of Proposal

Please e-mail a copy of the proposal to Erika Schulty; email: ESchulty@soa.org

Proposals must be received no later than January 25, 2020. It is anticipated that all proposers will be informed of the status of their proposal by the end of February 14, 2020.

The Committee wishes to have the project completed by September 1, 2020.

Note: Proposals are considered confidential and proprietary.

Conditions

The selection of a proposal is conditioned upon and not considered final until a Letter of Agreement is executed by both the Society of Actuaries and the researcher.

The Society of Actuaries/CCPSC reserves 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. The CCPSC also reserves the right to redirect the project as is deemed advisable.

The Society of Actuaries plans to hold the copyright to the research and to publish the results with appropriate credit given to the researcher(s).

The CCPSC may choose to seek public exposure or media attention for the research.  By submitting a proposal, you agree to cooperate with the Society of Actuaries/CCPSC in publicizing or promoting the research and responding to media requests.

The Society of Actuaries/CCPSC may also choose to market and promote the research to members, candidates and other interested parties.  You agree to perform promotional communication requested by the Society of Actuaries/CCPSC, which may include, but is not limited to, leading a webcast on the research, presenting the research at an SOA meeting, and/or writing an article on the research for an SOA newsletter.