Future building water loss projections posed by climate change

The insurance industry, like other parts of the financial sector, is vulnerable to climate change. Life as well as non-life products are affected and knowledge of future loss levels is valuable. Risk and premium calculations may be updated accordingly, and dedicated loss-preventive measures can be communicated to customers and regulators. We have established statistical claims models for the coherence between externally inflicted water damage to private buildings in Norway and selected meteorological variables. Based on these models and downscaled climate predictions from the Hadley centre HadAM3H climate model, the estimated loss level of a future scenario period (2071-2100) is compared to that of a control period (1961-1990). In spite of substantial estimation uncertainty, our analyses identify an incontestable increase in the claims level along with some regional variability. Of the uncertainties inherently involved in such predictions, only the error due to model fit is quantifiable.