Determining Extreme Values for the Insurance Sector

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Several industrial sectors require knowledge of climate extremes above and beyond those experienced during the satellite era. Examples include the insurance industry where regulators will soon require adequate capital to cover a 1 in 200 year event; and the nuclear industry which is required to prepare against a 1 in 10,000 year event. The common approach to determine these is to extrapolate from observations over the past 50 years or so, either directly or through the use of a catastrophe model. Often these estimates do not include a quantification of the uncertainties arising from either natural climate variability or climate change. This project aims to determine the risks that are missed by these standard practices.