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Environmental Risk Introductory Paper Series

Background and Purpose

Actuaries and our stakeholders may be impacted by environmental issues and risks in myriad ways. Insured and uninsured losses from natural disasters have exploded in recent years and are continuing to grow. Pollution and environmental degradation adversely affect mortality and morbidity rates and healthcare costs. The natural environment provides economic benefits that we are only beginning to understand and that are under threat due to habitat destruction and mass extinction. The threat of climate change exacerbates and adds uncertainty to all existing climate risks.

At the same time, the actuarial profession and our stakeholders in the insurance industry are in a unique position to help quantify and mitigate environmental risks via pricing and benefit incentives. Property insurance prices and benefits can encourage responsible and sustainable development. By developing insurance markets and making various types of insurance available in developing regions, which are disproportionately affected by environmental risks and hazards, we can provide protection that is critical for economic development. Insurers’ investment portfolios are at once subject to environmental risk and provide opportunities to invest in ways that reduce those risks. Insurance can provide coverage and behavioral nudges that support climate mitigation and adaptation efforts.

In spite of the risks posed by environmental issues to actuaries and our stakeholders, and in spite of the opportunities for actuaries and our stakeholders to address environmental risks, actuarial literature is limited with respect to such topics as: environmental risks, including natural disasters, pollution, clean air and water, degradation of the natural and human environment, resource depletion and sustainability, climate change and its consequences; local, national, regional and global efforts to address environmental risks; methods and models used by the scientific community to study environmental risks; methods and assumptions used to quantify the economic or financial risk associated with environmental hazards.

Research Objective

The Climate and Environmental Sustainability Research Committee (CESRC) of the Society of Actuaries wishes to produce a series of research papers introducing actuaries to various topics related to environmental risks. Papers should provide an overview of existing research into the selected topics, with a focus on the relevance of the topic to actuarial practice. Individual papers should be relatively short (2,000-5,000 words) and should be targeted to practicing actuaries. The number of papers and specific topics to be covered should be proposed by prospective researchers. Potential topics might include:

  • Introduction to environmental risks;
  • Introduction to environmental risk programs;
  • Catastrophe modeling;
  • Climate modeling;
  • Integrated assessment models;
  • The Intergovernmental Panel on Climate Change and its assessment process;
  • The UNEP Principles for Sustainable Insurance;
  • The UN Sustainable Development Goals;
  • Impact of environmental factors on mortality;
  • Interaction of climate change with other risks;
  • Sustainable development

This list of topics is intended to be suggestive, not exhaustive. Researchers should suggest a series of papers that would form a coherent whole and should ensure that proposed papers do not duplicate existing actuarial literature.

Research Output Required: A series of 2,000-5,000 word papers to be released in 1-2 month intervals. Proposers should specify the number of papers and the specific topics they would propose to cover.


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

  1. 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.
  2. 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.
  3. A description of the expected deliverables and any supporting data, tools or other resources.
  4. 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.
  5. A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions. The SOA Climate Change and Environmental Sustainability Committee is interested in completing this project in a timely manner.  Suggestions in the proposal for ensuring timely deliver, such as fee adjustments, are encouraged.
  6. Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.

Selection Process

The SOA Climate Change and Environmental Sustainability Committee will appoint a Project Oversight Group (POG) to oversee the project.  The SOA Climate Change and Environmental Sustainability Committee is responsible for the selection of the proposal to be funded.  Input from other knowledgeable individuals also may be sought, but the SOA Climate Change and Environmental Sustainability Committee will make the final decision. The SOA's Research Actuary will provide staff actuarial support.


Any questions regarding this RFP should be directed to Scott Lennox, SOA Staff Fellow (phone: 226-989-8786 email:

Notification of Intent To Submit Proposal

If you intend to submit a proposal, please e-mail written notification by June 17, 2019 to Erika Schulty (   

Submission of Proposal

Please e-mail a copy of the proposal to Erika Schulty.

Proposals must be received no later than July 1, 2019. It is anticipated that all proposers will be informed of the status of their proposal by August 12, 2019.

Note: Proposals are considered confidential and proprietary.


The Society of Actuaries 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 Society of Actuaries 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 Society of Actuaries 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 in publicizing or promoting the research and responding to media requests.

The Society of Actuaries 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, 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.