Actuaries Climate Index

December 2016

Measures Changes in Extreme Weather Events and Sea Level
Organizations representing the actuarial profession in the United States and Canada launched the Actuaries Climate IndexTM (ACI), which provides a quarterly measure of changes in extreme weather events and sea levels, available online at www.ActuariesClimateIndex.org. This index is based on analysis of quarterly seasonal data for six different index components collected from 1961 to winter 2016, compared to the thirty-year reference period of 1961 to 1990. The Actuaries Climate Index is an educational tool designed to help inform actuaries, public policymakers, and the general public about climate trends and their potential impact. 

The Actuaries Climate Index was developed by the Climate Change Committee, which is a joint effort of the American Academy of Actuaries, the Canadian Institute of Actuaries, the Casualty Actuarial Society, and the Society of Actuaries.

The Actuaries Climate Index looks at the continental United States and Canada, placed into 12 different regions. Higher index values indicate an increase in the occurrence of extreme weather events. The latest Actuaries Climate Index values show an increase in the impact of extreme weather events, such as high temperature, heavy precipitation and drought.

The risk measured by the Actuaries Climate Index is relative to the average frequencies during the reference period of 1961 -1990. The data is from neutral, scientific sources, generating objective, evidence-based results on extreme weather events. According to the data analysis, 1.02 is the current five-year moving average value for the Actuaries Climate Index. The index value remained below 0.25 during the reference period, reached a value of 0.5 in 1998, and first reached 1.0 in 2013.These values indicate a sustained increase in the frequency of extreme weather occurrences and changes in sea levels.

“The Actuaries Climate Index is designed to provide objective data about changes in the frequency of extreme climate events over recent decades in the continental United States and Canada,” said Doug Collins, Chair of the Climate Change Committee. “Actuaries are experienced in the assessment and mitigation of the financial consequences of risk, and we have developed the index for analyzing the climate.”

Actuaries Climate Index values for the most recent periods show:

• For the U.S. and Canada combined, the value for winter 2016 was 1.46, the sixth highest level below the peak reached in the fall of 2015. The high value was caused primarily by high temperatures in the northeastern U.S. and eastern Canada as well as heavy precipitation in many locations.
• The current highest five-year average values by region are in the Northwest Pacific (British Columbia and Yukon Territory), Northeast Atlantic (New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island) and Southern Plains (Kansas, Montana, North Dakota, Nebraska, Oklahoma, South Dakota, Texas and Wyoming).

Updates for values will be posted quarterly on www.ActuariesClimateIndex.org as data for each meteorological season becomes available. The organizations are also developing a second index, the Actuaries Climate Risk Index (ACRI), which will measure correlations between changes in the frequency of extreme events as measured by the Actuaries Climate Index and economic losses, mortality, and injuries.

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