Major actuarial professional organization submits letter opposing proposed dismantling of NCAR

Calls NCAR a "cornerstone of the nation’s open, scientific infrastructure for tracking and understanding weather and climate risk" and asks administration to reconsider its plans

I wanted to use today’s newsletter to highlight an article I saw appear on my various social media feeds a few times on Monday. The finance and risk modeling news site Risk Market News (RMN) published a piece focused on the Trump Administration’s threatened dismantling of the National Center for Atmospheric Research from the perspective of the risk management community.

In particular, they focused on a letter from the main US professional society for actuaries, the American Academy of Actuaries, that was submitted in response to the National Science Foundation’s call for input and proposals for the NCAR “reorganization” that NSF released a few weeks ago. The letter expressed the society’s deep opposition to the administration’s proposed dismantling of the renowned research organization. From the RMN article:

According to the letter, the move “would remove a cornerstone of the nation’s open, scientific infrastructure for tracking and understanding weather and climate risk.” The actuarial group frames NCAR’s continuity as both a scientific and economic imperative. “NCAR’s continuity is not only a scientific necessity, but an economic one,” the letter states. The Academy adds that the closure would strip away carefully maintained, publicly accessible, science-based data and modeling tools that insurers depend on to assess systemic climate risk and protect policyholders.

To me, this is a critical letter of opposition for a number of reasons. Most importantly, it shows how an industry totally outside of meteorology views the atmospheric sciences as crucial to its industry — and based on its own work feels that the atmospheric sciences are critical to our national economy.

Furthermore, it reinforces something that I think is critical for the general public to understand about the climate “debate.” Major economic sectors such as the insurance industry recognize that they are under serious risk from climate change, and need the atmospheric science community to not only continue their research to understand climate change but to actually expand their efforts to better quantify the potential societal impacts.

In my last few years in a leadership position at NOAA’s National Severe Storms Lab, I spent quite a bit of time engaging with public and private sector entities to develop projects in partnership with the reinsurance sector to try to help provide more actionable information about how the risks from severe weather hazard such as large hail and tornadoes might evolve under various climate change scenarios. From the various conversations I have had about this sort of work, it became clear to me that the insurance industry views climate change as a potential existential threat to their sector.

Indeed, the actuary society’s letter focuses on NCAR’s importance to the US insurance industry:

The Academy’s most pointed warning centers on catastrophe models—the analytical engines behind pricing, reserving, and capital adequacy in property and casualty markets. “NCAR has long supplied the foundational capabilities that enable catastrophe modeling and climate-informed pricing and reserving in the property and casualty insurance sector,” the letter explains. Any disruption “would materially degrade these capabilities, heighten uncertainty in risk assessments, and undermine the stability and affordability of insurance coverage for U.S. consumers.” The Academy details how actuaries depend on NCAR’s datasets “covering atmospheric dynamics, climate variability, and extreme event frequency,” describing them as “particularly foundational to the catastrophe models used in property and casualty insurance.” Without those resources, “the insurance industry faces increased uncertainty and greater challenges in accurately assessing and pricing risk.”

While I recognize that there likely are varying perspectives in the weather community and the political world about how much each sector (public, private and academic) should be responsible for the sort of work described above, what seems undeniable to me is that we are at a critical point for our society and economic sectors such as the insurance industry with regard to evolving weather and climate threats. Dismantling NCAR — and other core aspects of the federal atmospheric science infrastructure — will inject chaos into a system when stability is needed.

The American Academy of Actuaries clearly agrees:

The letter closes with a direct appeal to the administration. “We strongly encourage the NSF reconsider its plan to dismantle the NCAR, as doing so is very likely to negatively impact the industry, insurance coverages, and outcomes for the American public.”

Programming note: I will be on family travel the rest of the week. I am planning to put together newsletters and updates occasionally — but the posts will not be on the typical cadence of daily issuances around midday.

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