The first Beryl loss estimates are revealed

Hurricane Beryl became the earliest Category 5 hurricane ever recorded in the Atlantic — surpassing the previous record of Hurricane Emily by several weeks. Beryl made landfall in the US in Texas on 8th July at a lower intensity Category 1 event.

Moody’s RMS has estimated that insured losses in the US will likely fall between $2.5 billion and $4.5 billion. This includes damage from wind, storm surge and precipitation-induced flooding.

But as with every catastrophe, there are many losses that are not covered by insurance (known as “economic losses”). According to earth and climate science company Viridien:

“While everyone is surely relieved by Jamaica escaping a direct hit from Beryl, the country has sustained substantial agricultural losses that are largely uncovered. More detailed modelling of events like Beryl and their connection to interannual and decadal climate variability is critical to closing key coverage gaps.”

A combination of advancements in modelling and new types of risk transfer solutions is helping close some of the existing protection gaps. In this month’s issue of Climate Risk, you can read about new products that are aiming to protect those that are currently uncovered through alternative risk transfer solutions.

Evening Event: Revealing the blind spots: making the right decision at the right time, 23rd July

Timing is spot on as we enter into the promise of an active hurricane season and one Category 5 event already.

If any of the following areas are of interest to you — and you are in London on 23rd July — then we recommend registering now for this event supported by EigenRisk Inc. and Reask:

1️⃣ Insights beyond traditional catastrophe models — how do you account for annual and longer term climate shifts and complement your core model view?

2️⃣ Time is short — how do you automate daily shifts in hurricane forecasts and hurricane activity to keep your risk assessment correct?

3️⃣ How do you keep your clients informed about their risks when you are busy doing your day job?

4️⃣ There are more and more data sources and analytics available — how do underwriters access them all in one place?

5️⃣ Insurance may operate on a one year cycle, but what about longer term investments?

2024: the top 5 insurance themes in sustainability and climate

Now that we’re halfway through 2024, we’ve noticed a few main themes emerge within the climate and sustainability space. Through our conversations with insurers and brokers, we’ve collated the five key areas that are on the insurance priority list for the rest of the year.

Google X: adaptation for mitigating wildfire risk

Google X, the moonshot factory is entering the climate risk space with Bellwether — a Google X project. It is using artificial intelligence to help understand changes across the natural world and built environment. Hear from founder Sarah Russell as she spoke to Matthew Grant at our last event in New York on the importance of adaptation for reducing wildfire risk.

Unlocking the value of accurate property data: a vital resource for insurers, lenders and beyond

Insurers are not the only people who care about getting accurate property data. Banks, mortgage lenders and others also need accurate valuation, location and risk information. Join Matthew Grant on 8th August as he hosts a webinar with Sachin Keshavan, Head of Modelling SBS at SCOR, and George Gallagher, Partner at CoreLogic, to hear about the company’s property data solutions.

In the news…

Swiss Re: over a third of US power outages are caused by weather events

The electric grid is a complex network, exposed to a range of risks — with climate change exacerbating this. Recent research from Swiss Re investigates data from US power outages between 2012 and 2023, finding that more than a third were associated with severe weather-related incidents. Swiss Re explores how insurance and resilience strategies can mitigate the impacts of climate change on electric grids.

Global Parametrics and One Acre Fund to offer smallholder farmer insurance

One Acre Fund, an agricultural service provider offering financing and training to smallholder farmers, has partnered with Global Parametrics, a CelsiusPro Group company, to provide financial protection for smallholder farmers in Zambia and Malawi. The companies have developed a water-balance index to calculate payouts, offering protection against crop loss due to drought.

Tokio Marine Kiln partners with Kita for carbon credit insurance

TMK has partnered with carbon insurer Kita to provide political risk coverage for carbon credit project developers and investors. With rising political volatility in many regions, carbon credit projects face increasing risks that impact their ability to sell credits. In collaboration with TMK, Kita’s new ‘Carbon Political Risk Cover’ intends to mitigate these evolving risks.

Allianz develops parametric solution to support Colombian farmers

Allianz Colombia has developed a new parametric product to protect farmers’ livelihoods, with rainfall levels as a trigger. The cover has been developed in collaboration with Bancolombia and SFA Cebar, a local company specialising in solutions for Colombian agricultural businesses. The product was the first parametric solution of its kind for Allianz in Latin America and was in development for 12 months.

60% of insurance executives say climate change is a top priority for 2024

According to the International Insurance Society’s 2024 Global Priorities Survey, climate change remains a top priority — it has been the most pressing issue in the survey’s ‘Social and Environmental’ category for the last four years. 60% of industry executives are prioritising climate change in 2024. It’s an even more dominant issue for executives at P&C insurance companies, with 71% saying it’s a priority.

$7.7bn in losses from extreme heat in California over the last decade

Insurance Commissioner Ricardo Lara has released a report revealing $7.7 billion in losses from extreme heat events in California. The analysis measured the cost of seven significant extreme heat events over the past decade. It found that during extreme heat events, there are significant labour productivity losses, ranging from $7.7 million to $210 million per event, along with substantial uninsured wage losses.