Quant shop preps NLP-powered index for physical climate risk - Risk.net
Quant shop preps NLP-powered index for physical climate risk - Risk.net
Quant shop preps NLP-powered index for physical climate risk
Sharp rise in extreme weather events prompts PGIM Quant to aim for better climate-risk pricing
Prudential Investment Management Quantitative Solutions (PGIM Quant) is trying a new tack to price physical climate risk more accurately. It’s building an index to measure this specific subset of risks based on natural language processing (NLP) – the field of artificial intelligence in which computers interpret written or spoken language.
The AI initiative began in response to the rising frequency and intensity of extreme weather events across the globe, says the firm. In the US alone, data from
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Related Knowledge Center: Climate science
What began as a theory in the 1890s — that industrial emissions of carbon dioxide could increase global temperatures — had progressed to a scientific fact a century later. Scientists across a range of disciplines are studying the impact of the still-growing concentration of carbon dioxide and other so-called “greenhouse gases” in the atmosphere as they call for industrial and governmental policies to slow, then halt, the warming of the planet.