Insurance Underwriting Decision Study Based on Analysis of Extreme Weather Intensity

As global climate change intensifies and extreme weather events escalate in frequency and severity, the insurance industry faces significant challenges in risk assessment and underwriting strategies, highlighting the inadequacies of traditional approaches. This article presents a comprehensive study that addresses the urgent need to reconcile insurance companies' profitability with homeowners' ability to cope with increasing risks and losses. This study uses demographic and economic factors to assess the impact on insurance profitability and uses the TOPSIS algorithm to assess the profitability of insurance companies and formulate appropriate underwriting strategies. The analysis includes a comparative assessment of the forecast profitability and actual profitability of US and UK insurance companies in 2020. Their composite score index is greater than 0.2, and they all have the option of underwriting. Comparison with relevant data confirms the validity of the research. This article uses five indicators: population density, economic development level, the intensity of extreme weather events, community building resilience, and community service level to formulate decision-making plans. It uses the analytic hierarchy process (AHP) and consistency test to finally calculate a comprehensive scoring index. Determine the risk level of each region and provide targeted suggestions to insurance companies. In addition, a "property loss model" for future data prediction is developed to help insurance companies make profits and homeowners reduce losses, thereby achieving mutually beneficial results.