New research program aims to quantify wind, tornado risk in Canada and U.S.

Atmospheric and Environmental Research, a Verisk Analytics company specializing in climate and weather-related risks, has begun a new project to quantify shifts in hazard patterns related to severe thunderstorms in Canada and the United States.

The initiative, entitled “Climate Change: Tornado and Hail,” is co-sponsored by a group of insurance industry and financial sector companies.

AER’s remote sensing, meteorological and actuarial scientists, along with industry leaders, are conducting a historical analysis of thunderstorm wind, hail, and tornadoes to determine if those perils are showing a different frequency or severity than in the past.

The researchers are also assessing whether there is evidence of local influences on storm occurrence within different parts of a city. The AER Emerging Risk research study will focus primarily on tornadoes and hailstorms.

The Climate Change: Tornado and Hail research program is the second project in the Emerging Risk research program managed by AER for the insurance industry.

AER’s scientists develop actionable data through original research that is conducted in-house, leveraging its extensive data warehouses and broad range of scientific experts. The first research initiative assessed the risk of covered loss due to widespread, long-duration power outages and resulted in a catalog of space weather blackout scenarios for the United States.

“Despite the considerable efforts and resources applied by the insurance industry toward fundamental research into emerging risks, there has been and will always be significant gaps between the scientific community and the insurance industry,” noted John Seo, co-founder and managing principal at Fermat Capital Management.

“Our particular motivation for participating in AER’s Emerging Risk research program is to enable us to identify new risk transfer opportunities and expand the insurance-linked securities market beyond conventional risks in a responsible way.”

“Hail risk is of critical concern to the Canadian insurance market,” Jean Roy, vice president of Rating and Classification at TD Insurance also noted. “AER’s plan for original research in Canada, inclusive of cloud seeding influences, will inform how our insurance products need to evolve in hail-exposed parts of the country.”

“Roof-related claims have been a focal point for personal lines insurers during the past five years,” added Benjamin Rhodes, vice president of Personal Lines Product Management at The Hanover Insurance Group. “The new data resources that AER will be creating will improve our understanding of how changes in weather patterns, population growth, and construction characteristics can impact risk.”