Coupling a global climatic model with insurance impact models for flood and drought: an estimation of the financial impact of climate change

CCR, a French reinsurance company mostly involved in natural disasters coverage in France, has been developing tools for the estimation of its exposure to climatic risks for many years. Both a flood and a drought models were developed and calibrated on a large policies and claims database supplied every year with insurers’ data. More recently, CCR has been developing a stochastic approach in order to evaluate its financial exposure to extreme events. A large and realistic event set has been generated by applying extreme value statistic tools to simulate hazard and to estimate, using our impact models, the average annual losses and losses related to different return periods. These event sets have been simulated separately for flood and drought, with a hypothesis of independence, consistent with recent annual damage data. The newest development presented here consists in the use of the ARPEGE–Climat model performed by Météo-France to simulate two 200-years sets of hourly atmospheric time series reflecting both the current climate and the RCP 4.5 climate conditions circa year 2050. These climatic data constitute the input data for the flood and drought impact models to detect events and simulate the associated hazard and damages. Our two main goals are (1) to simulate simultaneously flood and drought events for the same simulated years and (2) to evaluate the financial impact of climate change