RMS launches new climate change models in US and Japan
Catastrophe risk modelling firm RMS has launched new models in the US and Japan that will assess the near- and long-term impacts of climate change across a wider range of perils and regions.
The RMS Climate Change Models aim to address the growing need for climate change analytics in operational underwriting and portfolio management activities, in addition to supporting the increasing demands of regulatory requirements such as those from the Task Force on Climate Related Financial Disclosures (TCFD), and the Network for Greening the Financial System (NGFS).
The new models will be available for major perils including US flood, US wildfire, and Japan Typhoon (including tropical cyclone induced inland flood). The existing North Atlantic Hurricane Climate Change Model will also now incorporate sea-level rise projections for the US, including the impact of vertical land movement, for example, areas of land sinking in the Gulf region.
Across the models, customers will be able to simulate the effects of climate change across four greenhouse gas concentration trajectories (known as Representative Concentration Pathways, or RCPs) at any time between 2020 and 2100.
Julie Serakos (pictured), senior vice president of model product management at RMS, explained that it is becoming increasingly important for businesses to strategically access the potential impacts of climate change across portfolios, risks and liabilities.
“There is also a growing need to capture sensitivity around the potential impacts of historical climate change, for example in perils where the consensus on this is limited,” he added.
“As disasters with a climate related footprint, such as flooding, wildfires, and hurricanes, increase in incidence and severity, it is also clear that this is a problem not just for the future, but one that needs to be strategically dealt with today, with the best tools available to give the clearest insights,” Serakos noted.
Paul Wilkinson, head of aggregation and risk strategy, Canopius, said: “The RMS models enable adjusting time horizons for the near- and long-term, combined with the full flexibility and range of the IPCC’s Representative Concentration Pathway (RCP) scenarios.
“Climate change presents one of the most significant risks to the (re)insurance industry. It is important to us to incorporate the latest science relating to climate change into our risk analytics in a manner that can be tailored to our needs and fully integrated across key business operations, such as portfolio management, near-term underwriting, and business planning.”
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