Modeling Future Climate-Induced Insurance Risk as Multi-Layer Networks

• Activity Number: 382 - Climate Networks and Extremes
• Type: Invited
• Date/Time: Tuesday, July 30, 2019 : 2:00 PM to 3:50 PM
• Sponsor: Section on Risk Analysis
• Author(s): Yulia Gel and Vyacheslav Lyubchich* and Asim Dey and Monisha Yuvaraj
• Companies: University of Maryland Center for Environmental Science and University of Texas at Dallas and University of Texas at Dallas and University of Texas at Dallas
• Keywords: climate networks; climate dynamics; insurance; multilayer networks; climate risk assessment; climate adaptation

Abstract

Due to non-catastrophic weather events, such as, for example, higher than normal precipitation or wind speed, insurance companies increasingly frequently incur high cumulative losses. Climate change further amplifies weather hazards. Weather-induced insurance risk generally represents a non-stationary non-separable space-time process, which often implies that more conventional methods of statistical inference for spatio-temporal data are inapplicable. We discuss how we use approaches for complex multi-layer networks and topological data analysis to shed more light on weather-induced hazards and associated peril maps, while accounting not only for space-time dependencies but for such key risk information as socio-demographics, building codes, and real estate prices.