The Role of Actuaries in Climate Change Adaptation

 
Yves Guérard, FCIA 

CIA Fellow Yves Guérard’s presentation during the Adaptation Canada Symposium highlighted how actuaries contribute to climate change adaptation at the individual, regional, national, and international levels.

Beyond a normative role in assessing sustainability, the actuary can encourage attenuation measures by taking into account the positive impact these measures have on risks; for example, within the context of the transition to a low-carbon economy. If the actuary does not do this, or if the assumptions used are outside the range of the generally accepted consensus, the actuary needs to disclose this in their report.

When facing new risks, the actuary can also play a more dynamic and creative role by identifying various possible scenarios for managing the financial impacts of those risks. She or he can promote a number of optimal choices for adapting to climate change by comparing costs over a long-term horizon and suggesting financial arrangements to fund them, including new risk-transfer tools.

Against the comparative benefits of the actuarial profession analyzing complex climate models, actuaries need, in collaboration with other professionals, to enrich the debate within civil society, to support disclosure of climate-related financial risks, and ensure that decision-makers are well informed.

Professional bodies are responsible for promoting the continuing qualification of their members within a changing environment. The 2016 publication of the Actuaries Climate Index (ACI) and the Actuaries Climate Risk Index (ACRI) is a regional initiative in response to the profession’s responsibility to make information broadly available and to educate both actuaries and the general public. A visual illustration of numerous climate-related risks should facilitate an improved perception of the variability and the uncertainty in the changes that go beyond simple warming, a topic which often monopolizes the media’s attention.

The full presentation is available here.

 

Canadian Institute of Actuaries/Institut canadien des actuaires
http://www.cia-ica.ca/