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Introduction for Actuaries on Integrated Assessment Models, Social Cost Of Carbon, International Framework Related to Insurance as a Mitigation or Adaptation Measure

Background and Purpose

The environment does not adhere to international borders, and policies that are not adopted in all countries are subject to what is done in the remaining ones. Integrated assessment models adopt this approach for academic disciplines, pulling knowledge together to reveal potential outcomes. The social cost of carbon, a concept first raised by the Reagan administration, goes beyond the accounting regimen in place today to place a cost on impacts to the environment and human health.

This world view of commerce goes beyond GDP metrics to measure the impact on future generations of this framework.

The goal of this project would be twofold:

  • To educate credentialed actuaries about environmental issues that go beyond physical and academic borders, and how insurers are involved; and
  • To educate actuarial students who are the future of the profession.

Research Objective

The Climate and Environmental Sustainability Research Committee will sponsor a research project which will take these concepts and introduce them to the actuarial profession through either a report or a series of articles that show how insurance can serve as a mitigation or adaptation measure by evolving coverage and price as the environment changes. The goals are:

  • Educate readers as to the role of insurance in environmental policy;
  • Help readers to understand how existing methods can be used to better understand and quantify the potential financial effects of environmental risks;
  • Share how insurers currently aid in mitigation and adaptation efforts.

Either a research paper (perhaps 30 pages long), or a series of articles would be written that respond to the goals of the project.  These articles could be utilized to promote the actuarial profession and should be written by credentialed members of an accredited actuarial organization.

Proposal

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.

Questions

Any questions regarding this RFP should be directed to Scott Lennox, SOA Staff Fellow (phone: +1-226-989-8786 email:  slennox@soa.org).

Notification of Intent to Submit Proposal

If you intend to submit a proposal, please e-mail written notification by November 1, 2017 to Erika Schulty (eschulty@soa.org).

Submission of Proposal

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

Proposals must be received no later than November 15, 2017. It is anticipated that all proposers will be informed of the status of their proposal by November 30, 2017.

Note: Proposals are considered confidential and proprietary.

Conditions

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.