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Climate Change

In late 2007, the ASHK has set up a working group of actuaries reflecting and researcing on how actuaries should allow for climate change in their daily work.  This working group will meet once a month with the main purposes:

To establish a point of reference for actuaries in Hong Kong, providing information on Climate Change (and other environmental threats) relevant to the work carried out by actuaries in the territory
To establish a database of publications dealing with environmental and Climate Change issues and their financial implications
To provide regular updates to financial institutions in Hong Kong about Climate Change and environmental threats relevant to their operations
To instigate the collection of data related to Climate Change, and use this information to identify new trends and patterns emerging which may be of interest to the actuarial society as a whole
To initiate or conduct research on the impact of Climate Change and environmental issues on the work of actuaries

If ASHK members feel also that climate change should be taken seriously by actuaries, they can join the Climate Change Working Group by contacting ASHK Office at info@actuaries.org.hk or Mr. Martin Noble at martin.noble@kpmg.com.


Work undertaken by the ASHK Climate Change Working Group

   
 

Some recent initiatives undertaken by the group are as follows:

   
 

1)

The working group ran a survey in May 2008 to gauge members' views on climate change.  The survey findings can be found in ASHK Newsletter Vol. 01/2009 (Pages 19-21).

2)

The group has recently compiled a list of publications from various sources which it thought may be of interest to members. Furthermore the group has focused on three of the more relevant publications and provided summaries of each. The full list of publications, and the first of these summaries are available below:   

   
 
   
 

Publications, articles and academic research that might be of interest

   
  “The Effects of Air Pollution on Mortality in Socially Deprived Urban Areas in Hong Kong, China
 

Chit-Ming Wong, Chun-Quan Ou, King-Pan Chan, Yuen-Kwan Chau, Thuan-Quoc Thach, Lin Yang, Roger Yat-Nork Chung, Graham Neil Thomas, Joseph Sriyal Malik Peiris, Tze-Wai Wong, Anthony Johnson Hedley, and Tai-Hing Lam, Environmental Health Perspectives, Volume 116, Number 9, September 2008, 1189-1194

   
 

“Air Pollution: Costs and Paths to a Solution in Hong Kong—Understanding the Connections Among Visibility, Air Pollution, and Health Costs in Pursuit of Accountability, Environmental Justice, and Health Protection”

  Anthony J. Hedley; Sarah M. McGhee; Bill Barron; Patsy Chau; June Chau; Thuan Q. Thach; Tze-Wai Wong; Christine Loh; Chit-Ming Wong, Journal of Toxicology and Environmental Health, Part A, 71: 544–554, 2008
   
  "Association between air pollution and general practitioner visits for respiratory diseases in Hong Kong
 

T W Wong, W Tam, I Tak Sun Yu, Y T Wun, A H S Wong, C M Wong, Thorax 2006; 61: 585 – 591

   
 

“A Tale of Two Cities: Effects of Air Pollution on Hospital Admissions in Hong Kong and London Compared”

  Chit-Ming Wong, Richard W Atkinson, H. Ross Anderson, Anthony Johnson Hedley, Stefan Ma, Patsy Yuen-Kwan Chau, and Tai-Hing Lam, Environmental Health Perspectives, Volume 110, Number 1, January 2002, 67 - 77
   
  “Weathering climate change: Insurance solutions for more resilient communities”, published by Swiss Re (2010)
   
  “European Weather Derivatives”: a UK Institute and Faculty of Actuaries working party paper
   
  “Asset Owners: Climate Change Initiative Update: Funds Survey Results”, published by The Climate Institute (2009)
   
  “Climate Change: Investment Initiative Update: Asset Consultants Survey”, published by The Climate Institute (2009)
   
 
   
  A collection of views on the impact of climate change on liability insurance 
   
  Publication by Munich Re: Liability for Climate Change: Experts’ views on a potential emerging risk
  Publication located by the CCWG in October 2010 via the following URL:
 

<http://www.munichre.com/en/reinsurance/magazine/publications/default.aspx>

   
 

Purpose of the publication:

   
 

The publication is a collection of views from industry and academic professionals.

As mentioned in the Foreword, the articles look at the role of professional indemnity, as well as the risk of liability claims based on damage allegedly resulting from CO2 emissions caused by industry, for example on the lines of class-action suits against tobacco producers or companies processing asbestos.

   
 

Conclusion / results / themes of the publication

   
 

We have selected two of the articles that we believe to be of interest to the reader; for a full list of articles the reader should refer to the original publication.

‘Attributing extreme weather events: Implications for liability’ comments that the dominant impacts of climate change over the next few decades are likely to be due to changing risks of extreme weather events.  The article comments that the scientific evidence for human influence in specific damaging weather events is evolving in such a way that the issue of liability is almost certain to figure more prominently in the near future.  That said, the article points to there being difficulties in asserting liability to specific parties, due to the large number of parties that could be considered to contribute to the climate change problem.

‘Professional liability and global warming claims’ makes similar comments, for example that determining the exposure to global warming-related claims faced by a range of professionals (possibly including actuaries) is a difficult task, due to the large number of potential impacts of climate change and an uncertain legal and regulatory environment regarding climate change-related liabilities.  The article also points to the suggestion that legal costs of insurers may rise significantly given this uncertain legal environment.

   
 

Why might the paper be relevant to members of the ASHK?

   
 

This publication offers insight into potential impacts of climate change on liability insurance business, which is widely written in Hong Kong and across the region.

Any emerging trends of liability business would be expected to impact a wide range of actuarial and insurance processes, including pricing, reserving, risk and capital management, product design and asset management.

   
 

Disclaimer: This is a high level summary and is not intended to be an executive summary of the publication or to formally summarise the publication in any way.  The reader should refer to the original publication and should not rely on this description for any purpose.

 
   

Related Links

 
Insurance and Climate Change
   
 

Climate Wise
It is a group of over 40 leading companies and organisations in the insurance industry, and is committed to taking action to reduce risk of climate change.  Its website provides latest news on climate change and other publications.

   
 
   
More about Actuaries and Climate Change 
   
 

A paper by Louis Perroy entitled "Impacts of Climate Change on Financial Institutions' Medium to Long Term Assets and Liabilities" 

An article from the UK Actuary Magazine:  http://www.the-actuary.org.uk/pdfs/04_09_07.pdf
 
 
   
  General Climate Change Source
 
   •  The Intergovernmental Panel on Climate Change
   
   

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