Open access, open ideas
Climate Risk is InsTech’s monthly newsletter dedicated to sustainability, climate and natural catastrophe-related insurance news - you can sign up for free here.
Open knowledge sharing for a resilient future
In a world increasingly shaped by the growing frequency and intensity of natural and systemic hazards, open, free knowledge sharing has never been more critical. We are, therefore, delighted to introduce The Journal of Catastrophe Risk and Resilience (JCRR). The JCRR is an open-access journal of peer-reviewed research and comment. JCRR champions the free, transparent exchange of ideas and insights, ensuring that financial barriers do not hinder the dissemination of critical research. The journal provides a collaborative platform where academics, industry professionals, policymakers and decision-makers can discuss the challenges posed by climate change and catastrophe risk.
JCRR is intended as a forum for new research, from hazard monitoring and risk modelling to strategies for adaptation and mitigation. Original research includes Projecting Tropical Cyclone Frequencies by Combining Uncertain Empirical Estimates of Baseline Frequencies with Climate Model Estimates of Change or the manuscript on Assessing Future Tropical Cyclone Risk Using Downscaled CMIP6 Projections.
Call for Submissions
JCRR invites you to contribute in different ways including full research articles, succinct research notes, comprehensive reviews and commentaries. Your insights can shape the understanding and management of catastrophe risk. You can find the submission guidelines here.
Recently on the InsTech podcast, guest-host Jonathan Gonzalez, CEO of Raincoat, was joined by Carolyn Kousky of EDF and Insurance for Good to discuss the global disaster insurance gap, where two-thirds of losses from climate disasters remain uninsured. They highlighted the potential of parametric insurance to address affordability and extend coverage to underserved communities. They also discussed the importance of public-private partnerships, regulatory adaptation and innovative models to cover non-property losses such as income disruption.
Events of interest
Our first two-day event on a topic of widespread interest. Join us in March to improve your understanding of risk and the tools available for assessing them. Efficiencies in the gathering, sharing and analysing of critical data reduce frictional costs for all. We are working with the leading figures in the global catastrophe, exposure and climate community to design an inspiring and educational event for 350 people.
Climate and Cat Risk news
In 2024, FEMA allocated over $2.1 billion USD in disaster assistance to Florida following Hurricanes Debby, Helene and Milton. More than 72,000 National Flood Insurance Program (NFIP) policyholders in Florida filed claims for flood damage from these hurricanes, contributing to the nearly 99,000 NFIP claims nationwide for 2024 flood events so far. NFIP losses from these events are estimated to reach $10.5 billion USD, with Helene accounting for $3.5 - $7 billion USD and Milton estimated at $1.2 - $2.5 billion USD. The private flood insurance market in Florida reported over $500 million USD in losses, while FEMA continues recovery efforts.
Severe flooding in eastern Spain, caused by the extreme weather event DANA (Depresión Aislada en Niveles Altos), is projected to result in insured losses exceeding €4 billion EUR, according to Morningstar DBRS. The Consorcio de Compensación de Seguros (CCS), Spain's state-backed insurer for extraordinary risks, will cover the majority of claims. This event, among Spain's costliest climate catastrophes, has led to 138,317 claims so far primarily for motor vehicles, residential properties and businesses.
Industry updates
At COP29, the UN’s Forum for Insurance Transition to Net Zero (FIT) launched its first global guide for insurers’ transition plans, outlining strategies to align underwriting and investments with a net-zero economy. Simultaneously, progress was made on the Loss and Damage Fund, which now exceeds $730 million USD in commitments and aims to support vulnerable nations with climate financing by 2025, integrating tools such as parametric insurance and catastrophe bonds. Strategic direction was also set for the Global Shield against Climate Risks, scaling risk transfer solutions to support resilience in 17 target countries.
Previsico has launched Instacasting, a flood forecasting solution using observed rainfall data to predict surface water flood risks, helping clients such as insurers and infrastructure operators mitigate losses. Additionally, through a partnership with Esri UK, Previsico’s solutions will integrate with Esri’s geographic information systems platform, providing flood risk mitigation to sectors such as utilities, transport and government, with potential global reach across 650,000 organisations.
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Aon’s Florida Flood v3.0 model, developed in collaboration with Fathom, has been certified by the Florida Commission on Hurricane Loss Projection Methodology (FCHLPM). The model assesses flood risk across riverine, surface and storm surge flooding, providing insurers with tools for rate-making and underwriting as Florida mandates certified models for residential flood insurance rate filings by 2025. With Florida’s annual flood losses averaging over $450 million USD since 2004, the model supports insurers in navigating flood volatility and building resilience.
Insurity has partnered with ICEYE to incorporate real-time natural catastrophe data from ICEYE’s SAR satellite technology into its geospatial analytics platform. This integration provides P&C insurers with access to location-specific disaster data, supporting claims processing, resource allocation and policyholder support. By combining ICEYE’s monitoring capabilities with Insurity’s platform, the partnership aims to improve the accuracy and speed of catastrophe response efforts within the insurance sector.
RSA Insurance has launched a Professional Indemnity (PI) product tailored for climate professionals, including consultants and companies advising on sustainability, net zero and climate-related strategies. This product aims to provide protection against claims of inadequate or financially harmful advice, covering legal costs and damages. The offering addresses the growing demand for climate consulting services, with markets for net zero, ESG and sustainability consulting projected to grow significantly in the coming years.
Technosylva, a provider of wildfire simulation and risk analysis solutions, has completed the acquisition of KatRisk, a company specialising in catastrophe risk modelling. The acquisition combines wildfire modelling capabilities with tools for assessing risks related to floods, hurricanes and severe storms, with the objective of supporting electric utilities, insurers, financial institutions and government agencies. Both organisations will maintain their existing product offerings while working to expand capabilities to address the evolving requirements of climate risk management.
CFC and Go Balance Ltd have launched an insurance feature embedded within Natural Capital Credits (NCCs), aimed at enhancing security and trust in the voluntary carbon market. Underwritten by CFC and facilitated by AMI Specialty, the insurance covers both cancellation and non-delivery risks. The insurance includes a two-year carbon cancellation policy and a three-year carbon delivery policy, addressing risks such as physical and political events.
Insights & reports
A joint report by Fathom and IFI Global highlights that only 30% of insurance firms have dedicated climate risk committees, lagging behind banks (63%) and closely aligned with investment management firms (31%). Despite 70% of insurers viewing climate risk as a central concern, many lack standardised governance frameworks and robust data resources, with 81% of respondents citing data limitations as a major challenge. The report underscores the need for boards to prioritise climate risk management, emphasising its multi-dimensional nature, spanning environmental, regulatory and reputational risks.
A joint whitepaper by Howden, Boston Consulting Group and the High-Level Climate Champions highlights the underutilised role of insurance in mobilising climate finance and supporting the $19 trillion USD investment needed to achieve 2030 climate goals. The paper emphasises that insurance can de-risk climate projects, reduce financing costs and improve investment certainty through both traditional and innovative solutions. Businesses are urged to prioritise insurance in transition plans, engage insurers early and address challenges such as capacity, regulatory constraints and data availability to fully leverage insurance as a tool for driving the green transition.
The RiskScan 2024 survey, conducted by Munich Re US and the Insurance Information Institute, identifies cyber incidents, changes in climate and business interruption as the leading concerns across insurance buyers and sellers. While all market segments recognise these risks, significant knowledge gaps persist, particularly regarding flood and cyber insurance. The survey highlights the rising frequency and severity of extreme weather and the growing impact of cyber threats.
A study from the Swiss Re Institute highlights the significant economic benefits of proactive flood adaptation measures compared to post-disaster rebuilding. Protective infrastructure such as dykes, dams and flood gates can reduce flood damage by 60-90% in densely populated areas, with benefits exceeding costs by up to ten times. Nature-based solutions, such as wetland restoration and policy interventions, are particularly effective in less populated areas. However, continual underfunding hinders widespread implementation.
S&P Global Market Intelligence's report, Evolving Natural Catastrophe Risks, explores how climate change and extreme weather are reshaping the insurance industry. Secondary perils such as floods, fires and severe convective storms now account for a growing share of global catastrophe losses, impacting reinsurance costs and risk retention by insurers. Incidents such as unexpected damage in non-coastal regions from Hurricane Helene and increasing flood risks in Europe emphasise the need for proactive risk management and flood-resilient infrastructure.
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