Part of the responsibility of an actuary is to predict the future. No, they don’t use crystal balls or Ouija Boards, they use data and trends determine risk. Usually they are occupied with issues like life expectancy, crime rates, and identifying regions that have high or low auto accident rates.
Actuaries also must determine the risk for insuring property for tornadoes, floods, and other natural calamities. To do this effectively, actuaries must study weather conditions, almost like a meteorologist. The difference is that an actuary is responsible for very long-range forecasts, sometimes years in the future. They are also responsible for decisions that will be made by insurance companies involving billions of dollars.
Everyone knows that climate change is one of the most important issues to our planet, and actuaries are studying the future impact of how temperature and sea level will possibly impact the insurance industry and how they should move forward with risk calculations.
The American Academy of Actuaries, the Canadian Institute of Actuaries, and the Casualty Actuarial Society are working together to combine the best scientific methods to accurately predict future climate conditions. It is vital for individuals, businesses, and governments that the insurance industry remains strong and steady as we move forward into uncertain times.