Refine Risk Assessment in Light of Climate Change for Profitable Underwriting
Insurance companies face several challenges – not just climate change, but also evolving industry regulations.
However, while regulatory challenges can be quite significant and costly, Deloitte claims in its “Insurance Regulator State of Climate Risks Survey”, conducted by the Deloitte Center for Financial Services in 2019, that the insurance risks of climate change are intensifying.
Insurance companies can’t sit back, they have to respond by initially analyzing and refining the risks of climate change to ensure that they can develop policies and strategies to enable resilience.
In this Intelligent Insurer Precisely-sponsored report delegates from Guy Carpenter, Zurich North America, Baron Weather, and
Precisely, discussed how to:
- Embed ongoing climate risk assessment, expertise, and mitigation efforts across underwriting, pricing, reserving, investing, and product development to make more profitable decisions.
- Augment underwriting models with big data/social media information and predictive analytics to broaden risk assessment considerations and overcome a lack of historical data in light of climate change.
- Exploit precise location data to pinpoint areas that are most at risk, taking into accounts factors such as elevation, wildfire risk, distance from services/coastlines, etc, and combine with existing policy data to inform profitable decision-making.
- Leverage new sources of weather data to improve risk assessment and pricing for climate change related exposures, tackle accumulation risk and guard against portfolio volatility with advanced data visualization tools.
- Collaborate with policyholders, regulators, and the wider insurance industry to mitigate climate risk exposure and fortify properties against severe weather events, utilizing usage-based insurance, financial incentives, and granular data sources.
- Examine the impact climate change will have on re/insurance capacity for property and ensure the availability and affordability of insurance products for the long term in the face of increasing premiums. Are changes to contracts, terms and conditions inevitable?
Download this report and learn more about how refine risk assessment in light of climate change can be profitable for insurance underwriting.