Minnesota Center for Financial and Actuarial Mathematics (MCFAM) Hosts 2-Day Virtual Event on Climate Change

Don’t miss the MCFAM Distinguished Lecture “Climate Change and Insurance”  the evening of Oct. 8, followed by a MCFAM Panel of Experts “Managing Climate Risk in the Financial System” the morning of Oct. 9. Both events are free and open to the public.

Dr. Vijay Manghnani, SVP, Risk & Analytics, PIMCO ILS Fund, Chief Risk Officer / Chief Actuarial Officer at Newport Re

On the evening of Thursday, Oct. 8,  Dr. Vijay Manghnani, a meteorologist, actuary, and financial quant will discuss how the insurance industry, in its role as a risk transfer intermediary, is often at the forefront of the financial impacts of climate change. Over the past three decades, the industry has been dealing with climate risks emanating from extreme events, such as hurricanes, floods, and wildfires. In response to the significant earnings and capital impacts of such extreme events, he notes there is a fairly robust analytical toolkit to assess physical climate risks using sophisticated catastrophe risk models. He will discuss how these models can help assess physical climate risks in insurance portfolios and how a similar approach might be adapted for broader finance portfolios.

Following Dr. Manghnani’s lecture on Thursday evening, he will be joined by a panel of experts the morning of Friday, Oct. 9, to further pursue topics relating to his talk and themes such as the pricing of carbon, analytical gaps the insurance industry has not addressed, industry accountability regarding environmental, societal and governance criteria (ESG), as well as uncertainty and extreme events.

Dr. Gary Hatfield, MCFAM Assistant Professor, is organizing this two-day event. He is pleased with the diversity of viewpoints included in the lecture and the panel. Hatfield said, “The audience will be able to see the topic of climate change, insurance, and the overall financial system from a multifaceted standpoint. We have Vijay who is an actuary with decades of experience in insurance catastrophe risk management and analytics, climatology, weather derivatives trading, and portfolio management. Juxtapose that experience with other experts on the panel. You will hear from Doug Collins, Chair of the Climate Change Committee, sponsoring body of the Actuaries Climate Index (ACI).”

Hatfield found panelist Jessica Hellmann through her work with the State of Minnesota. “She is a great compliment to the insurance view of climate change. Among many other research and educational roles at the University of Minnesota, Hellman works with governments and corporations to build investment in climate change adaptation.” She has co-authored several climate assessment and adaptation planning efforts, including the biodiversity and ecosystem portions of the Chicago Climate Action Plan and the 2014 National Climate Assessment.

The panel includes two other renowned experts with perspectives on the challenges that remain ahead for the financial system due to the impacts of climate change. Dr. David Stainforth, at the London School of Economics, is a physicist and climate modeler who specializes in characterizing and quantifying uncertainty in projections of climate change. Former MCFAM Distinguished Lecturer Dr. Bob Litterman is a well-known economist with a focus on pricing carbon. He recently chaired the panel of the Climate-Related Market Risk Subcommittee, Market Risk Advisory Committee of the U.S. Commodity Futures Trading Commission, which published a report three weeks ago, called “Managing Climate Risk in the U.S. Financial System.” As the report underscores in its Executive Summary, “Insufficient data and analytical tools to measure and manage climate-related financial risks remain a critical constraint. To undertake climate risk analysis that can inform decision-making across the financial system, regulators and financial institutions need reliable, consistent, and comparable data and projections for climate risks, exposure, sensitivity, vulnerability, and adaptation and resilience”.

If you are interested in learning more about the analytics of climate change in insurance and the overall financial system, you can RSVP to attend one or both events being held on Zoom at this link.

For details and timing of the MCFAM Distinguished Lecture and Expert Panel, go to this link.

Hosted by Minnesota Center for Financial and Actuarial Mathematics (MCFAM) University of Minnesota School of Mathematics.