Climate & Sustainability Resource Library

A Quantitative Approach to Evaluate Climate Change Impact on Typhoon Risk with a Case Study in the Western North Pacific Basin [April 2026]

By Yizhong Qu, Zhongdong Duan, Xiaoxuan (Sherwin) Li, Lei Pei, and Ji (Jeff) Yao
This study examines how climate change is reshaping tropical cyclone (TC) behavior in the western North Pacific and the resulting implications for typhoon risk and insurance losses in mainland China. Projections indicate a decline in overall TC frequency but a marked increase in the proportion of high-intensity storms, alongside a northward shift in tracks that elevates risk in eastern and northern coastal regions. Additionally, TC-related precipitation is expected to intensify significantly, exacerbating flood risks, particularly when combined with sea-level rise. These changes are projected to drive substantial increases in insured losses, especially for extreme, low-probability events. The findings highlight the urgent need for adaptive strategies in infrastructure planning, insurance pricing, and disaster preparedness, while acknowledging limitations related to model resolution and static exposure assumptions.

Understanding the Demand for Inclusive Insurance: A Pilot Study [January 2023]

By Ida Ferrara, Edward Furman, and Tsvetanka Karagyozova

The goal of this study is to pave the way for a more comprehensive assessment of the potential benefit of microinsurance (MI) to low-income households in any country, regardless of its level of development, by piloting and implementing a survey instrument to enhance our understanding of the drivers of risk- and insurance-related decisions pertaining to the purchase of health, life and property insurance. For the purposes of the paper, the authors take MI to refer to the provision of conventional insurance products with small limits and simple coverages to low-income individuals.

Climate, Spatial Dependence, and Flood Risk: A U.S. Case Study [December 2022]

By Robert J. Erhardt, ACAS; Mathieu Boudreault; David A. Carozza; and Kejia Yu

Flood represents one of the costliest and most disruptive natural disasters in the United States, and the economic losses from flooding are trending upward. While this trend is known to be driven primarily by an increasing population and wealth exposure, climate change is also affecting flood risk in more subtle ways. The authors merge data on economic flood losses, historical climate, census population, and geological characteristics to explore drivers of flood losses and climate trends. The data cover 292 watersheds spanning the continental United States, over the period 1979–2018. The authors fit a Bayesian spatial mixed-effects model for flood loss frequency and a Bayesian mixed effects model for flood severity loss per person. Both models control for measured covariates, contain random effects to capture variation from unmeasured covariates, and quantify climate drivers of flood risk.

Effects of extreme climate events on the morbidity of a sample of medical scheme lives in South Africa [November 2025]

By C Smith, C Kotzen, C Suttner, P Ndebele, and M Cohen

This paper examines the impact of extreme climate events on healthcare utilisation among privately insured populations in South Africa, addressing a key gap in actuarial and public health research. Using claims data from approximately 3.48 million medical scheme beneficiaries (covering around 40% of the market) between 2014 and 2024, the authors link health outcomes to regional temperature and weather patterns. Employing advanced statistical techniques such as kernel density estimation and distributed lag non-linear models, the study finds a U-shaped relationship between temperature extremes and morbidity. Both extreme heat and cold are associated with increased healthcare use, with notable variation by age group and disease category. The findings highlight the growing importance of incorporating climate-related risks into actuarial modelling and health system planning, particularly in developing-country contexts vulnerable to environmental shocks.

Taking ESG issues into account in asset allocation [French | November 2025]

By Areski Cousin, Valentin Erades, Alva Le Doussal, Steve Pierre, and Mathieu Schneider

This paper provides a practical guide to integrating environmental, social, and governance (ESG) considerations into asset allocation from an actuarial perspective. It outlines key ESG strategies, asset classifications, and the evolving regulatory landscape shaping responsible investment practices. The authors examine how ESG factors influence financial markets, treating them as emerging risk drivers that affect asset pricing, portfolio performance, and long-term returns. Attention is given to the challenges, such as availability, consistency, and measurement limitations, associated with ESG data and their implications for modelling and decision-making. The paper also explores scenario-based approaches, including climate stress testing and transition pathways, to assess portfolio resilience. Overall, it highlights the growing importance of ESG integration for improving risk management and aligning investment strategies with sustainable economic outcomes.

Climate Change in Malaysia: The Impact of Rising Temperatures on Mortality [September 2025]

By Nadiah Zabri and Tan Sze Won

This paper examines how climate change may affect mortality rates in Malaysia, using two complementary methods: literature review and statistical model. While near-term mortality impacts from temperature rises may appear moderate, it could become substantially more severe in the long term, especially considering the broader effects of climate-induced disruptions. The actuarial profession should continue to monitor the risks and improve risk assessment in this area.

ESG and opportunities for pension insurance companies [Finnish | February 2022]

By Katariina Vaviolahti

This paper considers the possibility of including sustainable financing legislation for financial market participants as part of the legislation that would be binding on pension companies. If this were the case, Actuaries of Occupational pension companies would have to take into account the changes of the environment in which they operate. As a tool for this, this paper presents the Bayesian method. The Bayesian method is a stochastic method and is based on Conditional probability. This work Briefly introduces the Bayesian model, how to facilitate calculations and how to estimate the error of the output of the model. It also presents two studies that have successfully used Bayesian methods to estimate mortality and disability rates and suggests further use of these research methods if sustainable financing issues become more widely integrated into the field of Occupational pensions insurance.