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Projected Changes in Insurability and Affordability of Insurance Coverages due to Climate Change

Background and Purpose

Changes in insurability and affordability of insurance makes insurers a critical path toward economic development in certain geographic areas.  If coverages are not sustainable from a profitability perspective, then some geographic areas will either not be developed, be self-insured, be abandoned or rely on government to provide coverage.  Alternatively, in some areas, regulatory authorities may step in and create risk pool mechanisms funded by certain types of participation schemes.  The potential for geographic areas to be underserved in an available and affordable insurance capacity, and/or not be developed, may have knock-on effects to existing investments in areas which may suffer.

A better understanding of where this is predicted to occur and the implications of insurance affordability and availability in the United States due to defined environmental perils, in defined areas and under certain future scenarios would allow for future planning by both the private and public sector and could offer solutions for mitigating this occurrence and pricing its cost.

Research Objective

The SOA’s Catastrophe and Climate Strategic Research Program Steering Committee (CCPSC) is seeking researchers or a team of researchers to perform a study which captures past trends and projects future trends of impacts of perils. While the researchers should focus on geographic regions in North America and/or more specifically in the United States due to this research being market-dependent, the process should be transferable as described to other geographic areas.  The research team should specify which regions and perils they propose to study.  The research’s future predictions should be done under the IPCC Climate Scenarios.

Studies should first clearly discuss the framework for the analysis, and then move on to its conclusions.  In this framework, it should be made clear how new assumptions could be substituted for the assumptions of the study.  We would like for the framework to be a sustainable tool for actuaries and other users to ideally be able to adapt to future changing situations and assumptions.

Climate trends occur over long periods of time.  A key challenge of this study will be to discern how to provide for long term impacts to risk horizons which are typically short term for coverages such as property.

The following are examples of proposed topics that could be addressed.  Researchers should focus on perils which they think would have the highest impact but are not limited to specific perils.  It would also be possible for researchers to compare and contrast multiple perils in their analysis.  The study should focus on or within North America, such as on the United States.  It might also be possible to focus the analysis broadly, and then illustrate a case study for a specific metropolitan area or region.

Please note that the below list is not meant to be exhaustive but merely examples of proposed topics that could be researched.

  • Perils: such as Wildfires, tropical cyclones, hail storms, inland flooding, severe wind storms, drought
  • Insurance Coverages: for example, Property, Casualty, Life, Health
  • Geographic Regions: A national analysis of the United States, an analysis of North America, including a case study of a metropolitan area
  • Outputs: For example: Create a heatmap of the US which shows in which areas insurance will be more vs less affordable and where insurance will be more vs less available, including how this heatmap is predicted to change over time.  Different heatmaps could be designed for different coverages.
    • Where impacts have been occurring, and are predicted to occur, illustrating how the landscape (figuratively and literally) changes over time
    • Quantify the resulting impacts in terms of economic and insured damages (which will presumably become a wider gap as insurances become scarcer)
    • Propose what will fill these voids, or if they will not be filled and the end result is population migration and concentration
    • Discuss knock-on effects of this, such as availability of resources in areas where concentrations increase
    • Propose how constituents can plan for the predicted changes
    • Propose interventions that can take place now and along the way to mitigate the loss of affordable insurance.
  • Affected parties: for example, insurers, governments, the public, companies deciding where to locate operations, transportation planning, infrastructure planning, building and real estate industries.

The steps necessary to accomplish this research are:

  • The researchers will perform a literature review providing the history of affected areas and the past impacts of environmental perils on geographical regions, and summarize methods used to deal with these impacts in the past. (Existing literature reviews which may pertain to the topic from existing Society of Actuaries research will be pointed out to the researchers.)  Past private and public solutions should be illustrated, as well as the prevalence of the options to abandon certain areas having been chosen.
  • Using the chosen areas, perils and output metrics, the researchers should estimate and illustrate how insurance availability and affordability would change under the predicted future scenarios.
  • The researchers will incorporate their findings into a report to be made available on the Society of Actuaries website and to be used as a reference by readers from the insurance industry, policymakers, regulators, and ideally by practicing actuaries to provide items to think about and risks to consider when considering how to approach the decision of providing insurance and pricing insurance in a given high environmental peril risk market.


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.


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

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:

Submission Of Proposal

Please e-mail a copy of the proposal to Erika Schulty; email:

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 August 1, 2020.

Note: Proposals are considered confidential and proprietary.


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.