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CGG: bringing climate science expertise to insurance

Founded in 1931, CGG provides data and consulting services within Earth science, data science, sensing, imaging and monitoring. InsTech’s Ali Smedley caught up with CGG’s Environmental Science team to discuss how the company can help insurers understand current and future climate risk, carbon sequestration projects and climate change uncertainties.

In conversation with: CGG

What is the background of CGG?

CGG was founded over 90 years ago as a geophysical company, specialising in surveying the Earth’s subsurface for natural resources. Over time, the company became a global provider of subsurface information, mainly for exploration and production in the energy sector.

As science and society has increasingly understood the impacts that oil and gas have on the Earth’s climate, the transition to renewable sources of energy has accelerated. CGG has been involved in hundreds of geothermal projects and most major carbon capture, utilisation and storage projects globally. We launched a strategy to significantly expand our business scope through using our core technologies and capabilities beyond oil and gas – even beyond energy markets.

Today, CGG is a global technology and HPC (high-performance computing) provider offering data and services in Earth science, data science, sensing, imaging and monitoring.

We offer a portfolio of solutions to help our clients solve complex energy transition, natural resource, environmental and infrastructure challenges for a more sustainable future.

How does your Environmental Science team help with this?

Our Environmental Science team uses CGG’s core Earth Science, data science and HPC capabilities to provide solutions to new and existing clients. We are looking to expand our portfolio of new technologies, data and services which address environmental, climate and energy transition challenges. This includes intelligence across terrestrial and ocean systems.

CGG’s focus has traditionally been outside of insurance. Why is the company now interested in the industry?

Our core clients are from the energy sector, but our data and technology offerings are also relevant to the vital role insurers will play as part of the energy transition. We have already worked within insurance by deploying remote sensing solutions to quantify marine pollution, as well as conducting feasibility studies with the European Space Agency to evaluate satellite potential for understanding risk exposures.

The insurance industry already has strong capabilities within catastrophe modelling, but has less expertise within the climate change and environmental science space, as highlighted by the recent InsTech Insurance Innovation Survey. Through CGG’s long history working with energy companies and our strong Environmental Science team, we are well-positioned to repurpose the technology and expertise we already have to help insurers better understand climate-related risks.

How can CGG help insurers understand climate risk in the next 12 months?

CGG is working on a comprehensive data platform, which will provide access to a wide range of environmental science, weather and climate data. This will allow insurers to explore local conditions and exposure to hazards such as flooding and subsidence. As well as understanding the current risk, insurers will also be able to investigate how risk will change in the future as a result of climate change. CGG has incorporated and analysed the latest science from the IPCC and will continue to include the latest scientific evidence on the platform.

Information provided on the platform includes land cover, infrastructure, geomorphology, ecological, socio-economic and climate data. We are also looking to provide intelligence on the vulnerability of assets, such as the age of properties and infrastructure, how they are being maintained and connectivity issues. Insurers will be able to understand supply chain risks – for example, what the cascading risks of an electrical substation being impacted by flooding may be. Climate risk is dynamic; it is important to incorporate this into any assessment of current and future risk.

How can CGG help with the assessment of nature-based carbon sequestration schemes?

Using our satellite imagery analysis and geospatial expertise, CGG can assess the land suitability of blue and green carbon sequestration schemes. This can include afforestation, peatland restoration and seagrass planting.

For these schemes to successfully sequester or reduce carbon, they need to be resilient to both the current and future climate. CGG can assess whether the current and potential future conditions of a site are suitable. For example, whether future temperatures are suitable for specific tree species to grow.

To complement our site suitability analysis, we can monitor nature-based carbon offset schemes to help with their validation. These schemes can face a variety of threats; with seagrass planting, for example, pollution and recreational boating can negatively impact growth. For afforestation it is mainly the threat of climate change impacts, through issues such as invasive pests, droughts and high temperatures. It is important to monitor these threats and ensure that the schemes are sequestering the amount of carbon being claimed.

To learn more about carbon offsetting projects and their risks, you can download InsTech’s latest report “Carbon offsetting: the insurance use case”.

What are the biggest challenges around future climate data and scenarios?

One of the main challenges is around understanding uncertainty and correctly interpreting climate data. Whilst it is possible for climate models to provide a specific figure for the mean temperature at a given location in the future, this is unlikely to be meaningful as there are so many different variables and uncertainties on how the world will transition.

Another challenge is around understanding how changes in aspects such as sea level will influence natural hazards. Mean sea level rise alone does not translate to increased losses from flooding – it is important to understand wave power and wind direction. Due to CGG’s strong computing capabilities, this is a phenomenon we can rigorously investigate.

How does CGG partner with other data and technology companies?

We are keen to work with partners to develop new tools and analytics. For example, we are working with third parties to develop performance monitoring techniques for underwater turbines. We also work closely with academics, such as through our involvement with ECOWind, a project funded by the Crown Estate and UK Research and Innovation. As part of this we are investigating the interactions between offshore energy installations and the marine, atmospheric and subsurface environments.

CGG wants to explore partnerships with like-minded data and technology companies within insurance who recognise the value that environmental and climate science can bring to the industry.

Why has CGG joined InsTech as a corporate member?

A few members of the CGG team attended an InsTech event and immediately saw the value of the network. The reports and articles that InsTech produces are also incredibly valuable, providing us with unique insights in areas where we don’t have expertise. Data solutions are at the core of CGG, so the conversations we have with the insurance industry through InsTech can enable us to create new insights and value for insurers much more quickly.

What should readers do if they want to learn more?

Our website is a good resource to understand more about our capabilities, but we would also love to hear from anyone directly. They can contact Guy James at [email protected].

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