By Adelaide Changole.
@GalloImages.
South African actuaries launched the nation’s first country-specific climate index as experts seek to manage risks and losses brought about by an increasing frequency of droughts, fires, floods and other extreme weather events.
The new free-to use index, developed for the Actuarial Society of South Africa, is updated quarterly and allows users to measure the frequency of specific extreme weather events against a 30-year base period that spans Jan. 1 1991 to Dec. 31 2020.
“Anyone interested in analyzing and comparing different data sets will benefit from using the index, which offers users insights into climate trends across South Africa and their potential impacts on various sectors,” Professor Rendani Mbuvha, actuary and lead developer of the index, said in an emailed statement.
During the testing phase, the loss history from two large short-term insurers was compared with data provided by the index, showing a direct correlation between loss events and extreme weather patterns, Mbuvha said.
Users of the index will be able to track occurrences of unusually high temperatures and low temperatures, periods of unusually heavy rainfall, as well as the severity and duration of drought periods going back as far as January 1981. Mbuvha’s ambition is to expand the index to include predictive scenarios and broader geographical coverage across other African countries.
“We hope this becomes a widely used tool to support climate-aware decisions at different insurers and financial institutions, and perhaps even outside of financial services,” he said.