The 2012 Fifth Assessment Report (AR5) of the United Nations Intergovernmental Panel on Climate Change (IPCC)
The 2012 Fifth Assessment Report (AR5) of the United Nations Intergovernmental Panel on Climate Change (IPCC) says:
"There is medium evidence and high agreement that long-term trends in normalised losses have not been attributed to natural or anthropogenic climate change." (My emphasis.)
"The statement about the absence of trends in impacts attributable to natural or anthropogenic climate change holds for tropical and extratropical storms and tornados."
"The absence of an attributable climate change signal in losses also holds for flood losses" (taken from chapter four of the 2012 report Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation).
Unfortunately, the IPCC's Summary for Policymakers does not contain these words. The IPCC is generally considered to be the main authority on climate change. The media focuses on the woolly words in the 'summary' and reports the solemn agreement from international leaders at climate change conferences. This should not be sufficient reason for the alarmist (defensive?) attitude to weather-related disaster risks in proclamations from institutions like the Bank of England and the Prudential Regulation Authority.
Consequently, actuaries should be wary of how they apply the suggestions made in The Actuary's July article 'Climate change impact on financial institutions' by Sharanjit Paddam and Kate Mackenzie (bit.ly/2b14Gj4).
If the result is increases in insurance premiums based on apocalyptic disaster forecasts found to be unreasonable (for example, if failing to take account of the IPCC science detail), this will not be good for the profession. Perhaps it is time for the IFoA to address the uncertainties in climate science and its failure to validate models. Continuing with a defence of relying on the science of another profession - when actuaries have the capabilities of examining it - is already uncomfortable for many, and may be held to be the equivalent of Nelson's turning a blind eye - without the favourable outcome.
Geoff Dunsford
11 July 2016
