Actuaries need to strategize how to manage risks dealing with environmental and social justice issues while setting premiums and loss reserves, according to an actuarial expert.
That advice was delivered recently at the Casualty Actuarial Society Spring Meeting in Quebec City by Dan Anderson, a University of Wisconsin professor of actuarial science, risk management and insurance.
Mr. Anderson defined risks dealing with environment and social justice as "sustainability risk," according to a report of his remarks provided by CAS.
He said funds' managers should take into account environment or social responsibility programs while evaluating companies.
Mr. Anderson said that these risks raise questions of potential long-term liability claims for actuaries.
In the case of global warming and climate change, claims may fall under occurrence policies as opposed to claims-made ones, said Mr. Anderson.
It is not yet certain how global warming may affect general liability and directors and officers liability because occurrence, bodily injury, and property damage must be determined, said Rod Taylor, managing director, Aon Environmental Services Group, who also spoke at the session.
Over time global warming-related claims will become less difficult to bring once it can be proven that poor or ill-informed decision making are to blame, said Mr. Taylor.
Some exclusions can be found in some general excess liability insurance policies, but it will be increasingly difficult for certain industries to ensure coverage for global warming, he said.
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