CILRIF sub-working groups consist of a fluctuating subset of the broader CILRIF Working Group's representatives who volunteer to contribute their valuable experience and expertise in specific climate finance-related topics.

On January 18th,2021,a sub-working group convened to discuss the advantages and disadvantages of climate models that are inherent to the development of a long-term climate-resilient insurance product.

A brief summary of the key ideas discussed:

• climate models are expensive, exhibit biases, and have resolution that is not high enough for climate modeling;
• however, climate models do provide sufficient information to move forward with a long-term insurance product design and pricing;
• hybrid approaches must be used where the climate models produce the climate, but should not necessarily be applied all the way to predict the extreme events;
• if there is a buyer, who wants to purchase insurance over a 10 to 20-year timeframe and is willing to pay a premium for it, the situation of pricing the product from the seller point of view is not that different from pricing it on a one-year time.

Please, refer to the presentation material to read about the session's agenda/outcomes in detail.