DiaLOG breakfast: integrating climate into actuarial science, from model to decision

‍Thursday September 25, 2025, 9:30am—12 pm — The DiaLOG Chair — Digital Insurance And Long-term risks (Risk Foundation, Louis Bachelier Institute) brought together researchers and professionals around a concrete issue: how to change actuarial and investment practices in the face of climate risk.

What was said

Quentin Guibert (Paris-Dauphine, CEREMADE) presented an original approach for Project mortality by integrating temperature. The idea: combine a stochastic multi-population model of mortality with a climate epidemiology model in order to connect daily fluctuations of temperature (heat as well as cold) and Variations in mortality.

• Application to French data (by age and gender); identification ofregional heterogeneities.
• Integration of IPCC scenarios To quantify life expectancy gains/losses and excess mortality during heat waves, with forecast intervals expanded.
• Direct involvement: of dynamic mortality hypotheses, better traceable, for pricing, provisioning and stress tests.

Étienne Raynal (GALEA & Associates) has detailed a asset allocation that is sensitive to climate risk based onreinforcement learning And the hidden Markov models (HMM).

• Detection of market regimes and sequential exposure adjustment.
• Formalization of a Explicit “climate bias” in portfolios (physical and transition risks).
• Expected benefit: resilience, performance/risk increased in an environment subject to climate shocks.

- The presentations are available here : https://chaire-dialog.fr/events/petit-dejeuner-septembre-2025

Why it's important for the sector

• Get out of “any extrapolation of the past” : climate extremes shake up the games of hypotheses. Life tables and models should incorporate weather/health signals and climate uncertainties.
• Linking climate and capital : asset allocation can (and should) involve a measurable aversion to climate risk, with clear and auditable rules.
• Governance and data : quality of daily series, documentation of climate hypotheses, reproducibility codes/scenarios and Model review become pillars of compliance and management.

And what's next?

Exchanges, in the classroom and online, confirm the need for operational procedures : regular model updates, climate stress tests, traceable indicators for risk committees, and sharing of use cases between peers.

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More information on the DiaLOG Chair: www.chaire-dialog.fr