The combined risk of tropical storms and floods

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Ali Smedley

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The combined risk of tropical storms and floods

According to Munich Re, Hurricane Ian was responsible for more than a third of overall losses and for half of all insured losses from natural disasters globally in 2022. The next costliest event of the year was flooding in the southeast of Australia.

The combined risk of floods and tropical storms is becoming increasingly important for insurers to understand. These perils are two of the biggest industry loss drivers, and their impact has increased over the last five years. Natural hazard modellers Reask and Fathom have recently partnered to connect these two perils directly into one model.

In November 2022, Reask and Fathom co-hosted an InsTech event which reviewed how to understand and manage the key drivers of climate change in cyclones and floods. The audience of over 150 was made up of many major insurers and brokers. The discussions covered how insurers are incorporating future climate risk into underwriting and portfolio management, as well as views on the future of climate analytics and data from industry experts. To learn more about what was discussed, read our latest report based on the event here.

Lloyd’s of London: Powering innovation to solve new global challenges

Matthew was joined by Dawn Miller, Lloyd’s of London’s Commercial Director, for InsTech podcast episode 226. They discuss how Lloyd’s is addressing the evolving challenges and opportunities within carbon emissions measurement and reduction, along with other ESG issues. The conversation also covers the implications of insuring new assets such as hydrogen pipelines compared to other liquified gases.

Digital event: Property Intelligence - understanding and managing natural hazards

To support the launch of the InsTech report, ‘Property Intelligence - understanding and managing natural hazards’, Matthew Grant and Ali Smedley are hosting a Live Chat to discuss the findings with guest speakers from companies featured in the report. The panel will discuss the latest trends in catastrophe modelling, hazard data and risk mitigation. Register here to attend on the 30th March at 2:00pm GMT.

In conversation with Guidewire Analytics: From systems of record to systems of insight

InsTech’s Tara Allsopp joined Roger Arnemann, General Manager and SVP of Guidewire Analytics. The pair discussed acquisition and partnership with data analytics companies, including the company’s acquisition of property risk data provider HazardHub, and the various use cases of data analytics in the insurance value chain.

In the news…

Chaucer partners with Kita on carbon credit insurance

Chaucer is providing investment and lead underwriting capacity to Kita for its carbon credit delivery insurance. The company’s first product, Carbon Purchase Protection Cover, enables carbon credit buyers to protect themselves against the risk of carbon sequestration projects failing to deliver expected volumes of carbon credits. This could be as a result of a wildfire burning down trees planted as part of an afforestation project or fraud which invalidates the carbon credits prior to delivery.

McKenzie Intelligence Services launches post-event US hail product

McKenzie Intelligence Services (MIS) has announced that hail data will now be available on its Global Events Observer (GEO) platform to accelerate claims responses post-event. Its new capability records maximum hail size and sustained duration in affected areas and translates them into 1km x 1km grid squares. To hear more about how MIS provides post-event intelligence, you can listen to podcast episode 219 with MIS’ Daniel Grimwood-Bird and Brush Claims’ Troy Stewart.

LightBox expands partnership with First Street Foundation for flood risk

LightBox and non-profit research group First Street Foundation have quantified the financial impact of flooding on commercial properties in the US. First Street Foundation’s probabilistic flood model shows the risk of flooding at any location in 48 US states due to pluvial, fluvial and coastal surge flooding. This model has been combined with LightBox’s building characteristic data to estimate how deep water will be for every structure under a variety of climate change scenarios, with further analysis by First Street and engineering firm Arup now showing the financial impact.

ZestyAI extends its offering to the real estate market

ZestyAI has partnered with Black Knight, a provider of data, software and analytics to the mortgage and home equity lending and servicing industry. ZestyAI’s property risk analytics platform, Z-PROPERTY™, will be available to Black Knight’s clients to provide property-condition reports and risk insights. To read more about how ZestyAI uses machine learning and aerial imagery to identify key building features, you can download InsTech’s recent Property Intelligence report.

JBA: ‘Build Back Better’ scheme could reduce future flood losses

Research from JBA has found that Property Flood Resilience (PFR) measures could significantly reduce losses under an intermediate future climate change scenario. The review explored the implications of Flood Re’s ‘Build Back Better’ initiative, which enables insurers to fund up to £10,000 GBP for each individual property on PFR measures after a flood. If 3% of at-risk residential properties across the UK used the full £10,000, losses could be reduced by £350 million a year - a return on the £2.4 billion investment in under 7 years. To learn more about JBA’s catastrophe models, flood maps and analytics, you can listen to InsTech’s podcast episode 206.

EigenRisk partners with Teren for US wildfire model

Climate resilience data and analytics company Teren has partnered with EigenRisk to provide its US wildfire potential model on the EigenPrism catastrophe risk management platform. The model integrates and analyses climate, terrain, vegetation and land use data to create an index of wildfire potential.

dClimate partners with GECOsistema and Shamba Network for climate data

dClimate is continuing to add climate data to its decentralised marketplace through several new partnerships. GECOsistema will now provide access to its flood modelling tools to users in the dClimate ecosystem. Shamba Network’s climate data from across sub-Saharan Africa, including vegetation, weather, greenhouse gas and wildfire information, will also be available on the dClimate marketplace.

Chainlink collaborates on carbon offset insurance product

A new partnership is using blockchain technology for parametric insurance covering carbon offset projects against disasters such as wildfires and floods. Chainlink’s blockchain oracle technology connects Floodlight’s geospatial weather data to Etherisc’s parametric insurance smart contracts. An initial use case for the product covers trees whose carbon offsets are tokenised on Coorest’s platform. To learn more about how blockchain, smart contracts and third-party data are being used to create carbon offset insurance products, register here for our upcoming digital event sponsored by Chainlink Labs.

Tensorflight partners with Risk Solved

The partnership will bring Tensorflight’s property risk data onto the Risk Solved platform, helping to improve risk selection and pricing for underwriters, increase portfolio profitability and provide insurers with better risk mitigation advice for brokers and their clients. Jacob Grob, Tensorflight’s Chief Revenue Officer, recently joined Matthew on the InsTech podcast to discuss how the company uses AI, aerial and street view imagery to provide data and risk analytics on commercial and residential properties globally.

WhenFresh property API to be used for WNS ‘quote & buy’ solution

Business process management company WNS is providing a ‘quote & buy’ solution for UK home insurance. Potential customers only need to input their basic personal details and property address to quickly receive an accurate quote. Property attribute and risk data is then retrieved using the WhenFresh API, reducing manual input for potential customers and improving the risk selection and underwriting process for insurers.

Norton Rose Fulbright survey: ESG dispute exposure increased in 2022

28% of the 430 general counsel and in-house litigation leaders surveyed said their ESG dispute exposure increased in 2022. The report also found that while only 8% of those surveyed were involved in ESG-related class actions last year, 37% of those who said they are wary of future class actions view ESG as “a major driver”.

Marsh: climate-related risks to be the most severe over the next decade 

Marsh has released its 2023 Global Risks Report, developed in collaboration with the World Economic Forum. Whilst the “cost-of-living crisis” is ranked as the most severe global risk over the next two years, the top four risks over the coming decade are climate and environment-focused. “Failure to mitigate climate change” is ranked as the highest, followed by failing to adapt to climate change, natural disasters and biodiversity loss.