Against the backdrop of severe weather events in Texas, Federal Reserve official Lael Brainard provided a strong statement on climate risk reporting and analysis: “Financial institutions that do not put in place frameworks to measure, monitor, and manage climate-related risks could face outsized losses on climate-sensitive assets caused by environmental shifts.”
Active climate risk management still remains a weak point for most companies. The first step to bolster resilience? “Identify and quantify exposures related to assets, to locations, and to clients.”
A 20 year study of the top 100 P&C insurers identifies underwriting with deep insights and digitally enhanced productivity are two key commonalities among top-performers.
Relying on manual spreadsheet processes to prepare or analyze risk exposure data will inevitably lead to inefficient and ineffective risk management strategies. Insurtech opens up new actionable insights hidden between large datasets and formats.
The challenge with accurate climate risk assessment isn’t the quantity of data; it’s the quality of analysis arising from data siloes.
Investment in #insurtech is no longer a luxury, but a necessity to support core operational strategies as risk and insurance professionals meet the needs of their clients. While COVID spurred the digital push, advanced analytics serve as key differentiators to better design effective risk strategies.
UNEP’s final report for the “Principles of Sustainable Insurance Initiative” urges insurers to take a more integrated approach to climate risk analysis that includes physical, transition, and litigation risks in scenario-based frameworks.
Less than a third of enterprise risk professionals feel very confident in their technologies capturing an accurate, early view of unexpected events, while 7 in 10 find access to real-time information to be siloed.
A few days of hesitation to a natural catastrophe can mean total loss during a global pandemic. Effective rapid response to severe weather events requires revamped risk strategies and improved insurtech to asses historically underestimated risks.
As insurtech adoption accelerates, insurers can “differentiate themselves from other companies by how they respond to customers at times of need” with improved catastrophe modeling and real-time real-time event monitoring.