Scientists believe that global warming will trigger increasingly more frequent and violent storms, heat waves, flooding, tornadoes and cyclones in some areas of the globe, while other areas will slip into cold or drought. Although the effects of climate change will impact every segment of the business community, the insurance industry is especially at risk. Extreme weather events in past years have caused tens of billions of dollars in losses for insurers.
In many customer surveys and database marketing applications such as segmentation, profiling and predicting consumers’ choices, the joint distributions of covariates of interests are required. However, for variety of reasons, such as protection of clients’ confidentiality, the data are often available only in marginal frequency distribution format. This makes it difficult to use the covariates in a meaningful way where joint distributions are required for analysis decision making.