Research and Application of Underwriting Decision Model Based on Climate Risk Factor

In recent years, the frequency of extreme weather has led to an increase in claims costs for the insurance industry resulting in higher insurance premiums. This paper addresses how to strike a balance between the profitability problem of insurance companies and the affordability of customers. Firstly, we construct an underwriting decision model based on the climate risk coefficient, then we use the entropy weight topology to measure multiple types of climate risks, then we estimate the disaster loss and insurance claim probability by ARIMA and random forest; we use the data envelopment analysis model to assess the underwriting efficiency, and we use the gray prediction model to predict the gap trend, and secondly, we derive the decision function. Finally, we chose the Statue of Liberty as the object for risk assessment object, using the established model to calculate, and concluded that the Statue of Liberty faces a climate risk index of 0.624 and proposed protection measures.