Atmospheric and Environmental Research ( AER), a Verisk Analytics (Nasdaq:VRSK) company, announced today that its scientists have begun a new emerging risk research program entitled Climate Change: Tornado and Hail to quantify any shifts in the patterns of hazard related to severe thunderstorms in North America. The initiative is co-sponsored by a group of insurance industry and financial sector companies.
AER’s meteorological, remote sensing, and actuarial scientists are teaming with industry thought leaders to conduct an extensive historical analysis of thunderstorm wind, hail, and tornadoes to determine whether those perils are exhibiting a different frequency or severity than in the past. The AER research team is also assessing whether there is evidence of local influences on storm occurrence within different parts of a city. The AER Emerging Risk research study will focus primarily on tornadoes and hailstorms, which are of high interest to commercial lines and personal lines insurers in both the U.S. and Canada.
“Despite the considerable efforts and resources applied by the insurance industry toward fundamental research into emerging risks, there has been and will always be significant gaps between the scientific community and the insurance industry,” said John Seo, PhD, co-founder and managing principal, Fermat Capital Management. “AER has the technical expertise, the industry knowledge and, just as important, the operating model to close such gaps. Our particular motivation for participating in AER’s Emerging Risk research program is to enable us to identify new risk transfer opportunities and expand the insurance-linked securities market beyond conventional risks in a responsible way.”
“Roof-related claims have been a focal point for personal lines insurers during the past five years,” said Benjamin Rhodes, vice president of Personal Lines Product Management at The Hanover Insurance Group. “The new data resources that AER will be creating will improve our understanding of how changes in weather patterns, population growth, and construction characteristics can impact risk.”