Spatial dependence and diversification of climate extremes for global (re)insurance

保险是一种典型的风险转移机制，人们支付预定的保费以换取风险保障。“多数人对少数人的不幸的贡献”是伦敦劳合社1668年成立时的座右铭。这句老话说明了保险业的多元化，无论是在投保人还是业务范围内，这反过来又保证了财务稳定和长期生存能力。然而，洪水和飓风等极端气候对保险公司的财务稳定性造成了重大压力。这是因为这些灾害具有系统性（或广泛的空间范围），造成罕见但巨大的损失。极端气候事件造成的损失通常由政府和房主分担，或者大部分转移到国际再保险行业。再保险也是一种风险转移机制，但保险公司（和其他组织）支付保险费。再保险业务本质上是全球性的，它依靠国际投资组合来稳定极端气候等风险带来的巨额索赔。但在这种水平上，国际（再）保险组合可能受到厄尔尼诺/南方涛动等全球气候现象或其他区域气候影响的影响。例如，气候科学中众所周知，厄尔尼诺/南方涛动会同时影响世界各地的洪水和飓风，即使这些地点相距数千公里。该研究提案的目的是提供数学表述，说明极端气候如何在全球不同地点发生（空间依赖性）及其对大型（国际）国家（再）保险组合的影响（空间多样化）。极端气候的全球多样化研究处于精算学和气候科学的边界，具有挑战性，因为它需要了解这些事件的地方和全球动态。由于本质上是高维的，因此我试图利用我们对这些自然现象的物理理解，创建更现实的模型和金融风险管理方法，从而推动精算和气候科学的发展。保险，无论是私人的还是公共的，都是灾后恢复过程的一个关键组成部分。获得负担得起的保险对于缩小保护差距和缓解通常对弱势群体造成更严重影响的气候不平等至关重要。国际再保险提供了一种从全球多样化中受益的简单方法，这反过来又确保了加拿大保险业的长期生存能力，同时也减少了纳税人不断补偿灾害财政援助计划损失的需要。因此，这项研究提案为精算师，经济学家和金融分析师提供了数学工具，以设计公共和/或私人（再）保险计划，以应对未来气候变化的可持续性。

Insurance is a typical risk transfer mechanism where one pays a predetermined premium in exchange for risk protection. "The contribution of the many to the misfortune of the few" was Lloyd's of London's motto upon its foundation in 1668. This old saying illustrates that insurance works on diversification, either among policyholders or lines of business, which in turn guarantees financial stability and long-term viability. Climate extremes such as floods and hurricanes, however put a significant strain on the financial stability of insurers. This is because of the systemic nature (or wide spatial extent) of these disasters that generate rare but tremendous losses. Losses from climate extremes are typically shared with governments and homeowners or in large part transferred to the international reinsurance industry. Reinsurance is also a risk transfer mechanism but insurers (and other organizations) pay premiums for protection instead. Global by nature, reinsurance counts on international portfolios to stabilize large claims from risks such as climate extremes. But at such level, international (re)insurance portfolios may be affected by global climate phenomena such as El Niño / Southern Oscillation (ENSO) or other regional climate influences. For example, it is well-known in climate science that ENSO affects flood and hurricane occurrences simultaneously around the world, even if such locations are thousands of kilometers apart. The aim of the research proposal is to provide mathematical representations of how climate extremes may occur at various locations globally (spatial dependence) and their effects on a large (inter)national (re)insurance portfolio (spatial diversification). The study of global diversification of climate extremes, which is at the boundary of actuarial and climate sciences, is challenging because it requires an understanding of local and global dynamics of these events. Being high-dimensional by nature, I thus seek to exploit our physical understanding of these natural phenomena, to create more realistic models and financial risk management approaches that in turn advance both actuarial and climate sciences. Insurance, either private and/or public, is a key component of the disaster recovery process. Access to affordable insurance is essential to reduce protection gaps and mitigate climate inequalities generally affecting vulnerable populations more severely. International reinsurance provides an easy mean to benefit from global diversification which in turn assures the long-term viability of the Canadian insurance industry while also reducing the needs for taxpayers to constantly compensate for losses from disaster financial assistance programs. This research proposal thus provides the mathematical tools for actuaries, economists and financial analysts to design public and/or private (re)insurance programs for climate extremes that are sustainable in the future in the face of climate change.