New IAA paper: Actuarial Considerations Around Climate-Related Risks on Social Security

Climate change presents a formidable challenge to social security systems worldwide. The new publication Actuarial Considerations Around Climate-Related Risks on Social Security from the International Actuarial Association’s Climate Risk Task Force, in collaboration with the International Social Security Association (ISSA), explores the implications of climate-related risks on social security, focusing on actuarial perspectives. 

Climate-related risks disrupt demographic, economic, and investment-related assumptions critical for social security analysis. Accurate projections require consideration of practical scenarios amidst uncertainties. Despite challenges, quantifying climate scenarios aids in understanding risks and informing decision-making. Improved data and scenario exploration enhance probabilistic support for economic and financial analyses. The paper delves into the main climate-related risks that affect Social Security Programs, key assumption classes crucial for social security actuarial projections, and future uncertainties and opportunities. It offers practical insights and methods for integrating climate risk considerations and potential impacts on actuarial work for Social Security Programs.

The aim of this paper is to create awareness and assist actuaries (and others) in understanding the role actuaries can play in collaboration with social security professionals to design resilient programs. Enhancing qualitative and quantitative analysis is essential for developing climate-resilient systems.

This paper is the seventh in a series, the preceding six papers along with this paper are available on the IAA website.

Stay tuned for the Climate Risk Task Force to host a webinar later this year to present the paper!