The market for climate risk forecasts suffers from information asymmetries which could be mitigated by warranties from forecast providers. Some potential reasons why warranties are not commonplace are worrying. — The market for climate risk forecasts suffers from a problem economists call “asymmetric information”: the sellers of forecasts probably know more about their accuracy than the buyers. A short or medium range weather forecast can be verified in a couple of weeks, and reasonable statistics about their accuracy can be…

The market for forward-looking climate information is structurally vulnerable to bad products pushing out good products. This will undermine the credibility of climate-related risk disclosures, turning them into a cost without a benefit. In 1970, the economist George Akerlof published what would become a classic paper called, “The Market for…

There is a proliferation of net zero pledges and commitments being made by countries and companies. We lack an effective mechanism to aggregate expertise and judgements about their credibility and thus predict our progress towards net zero. Purpose-built prediction markets would be well-suited to this task. — Next month the COP26 meeting will take place in Glasgow. The first stated goal of COP26 is to “Secure global net zero by mid-century and keep 1.5 degrees within reach.”

On November 30 the 2020 Atlantic hurricane season came to an end and Hivemind settled prediction markets forecasting how many hurricanes there would be and how many would make landfall over the U.S. — The 2020 hurricane season was one of the most active ever seen. There were 30 named storms, beating the 2005 record of 28. Of the 30 storms, 13 achieved hurricane strength and 6 of those made landfall over the U.S., with a further 4 making landfall over Central America.

An analysis of forecasts produced by Hivemind’s AGORA prediction market platform suggests they are probabilistically calibrated. — AGORA is a prediction market platform that produces forecasts by aggregating the judgments of people taking part in the market. The collective forecast assigns a probability to each possible outcome. An obvious question, for anyone thinking about using AGORA for forecasting problems, is how good are AGORA forecasts?

Mark Roulston, Senior Data Scientist • 08 Sep 2020 Earlier this month Hivemind joined Cohort-5 of Lloyd’s Lab programme to promote InsurTech startups. As part of our activities in this programme, we are running a prediction market for the number of hurricanes that will form in the Atlantic this year…

Mark Roulston, Senior Data Scientist • 05 Oct 2020 We have been working in conjunction with Lloyd’s Lab to investigate the use of prediction markets — using AGORA, our prediction market tool — as a method for combining expert judgements into consensus forecasts relevant to the insurance industry. Some of the…

Mark Roulston, Senior Data Scientist • 15 Oct 2020 During the evening of Friday 9th October Hurricane Delta made landfall on the coast of Louisiana as a category 2 storm, very close to where Hurricane Laura made landfall in August. Delta was the fifth hurricane to make landfall over the…

Mark Roulston, Senior Data Scientist • 15 Oct 2020 During the evening of Friday 9th October Hurricane Delta made landfall on the coast of Louisiana as a category 2 storm, very close to where Hurricane Laura made landfall in August. …