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

Lightning storm

PGIM Quantitative Solutions 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 the National Oceanic and Atmospheric

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