Timely insights from Matthew Grant Instech London. Why are they important?

"The market for climate analytics and data is about to explode. Insurers and banks now need to access and use high-quality hazard and location information, and be able to assess future changes and impacts, in order to report on climate risk. This is going to turbocharge revenue opportunities for companies that are able to provide the necessary information and gain credibility with insurers and the regulators. But it’s by no means simply a “plug and play” opportunity. The current generation of models and data are predominantly backwards-looking. Understanding future climate risk properly requires these models to be “climate conditioned” which is rarely simple."

Matthew Grant

Lloyd’s CEO John Neal described climate change as “the largest single underwriting and investment opportunity” that most re/insurers will see in their careers when he spoke at S&P’s virtual 37th Annual Insurance Conference this month. That’s a bold statement, but it reinforces the point that the role of the regulator is not just to say “no”.

The modelling of natural peril risk is today a successful but boutique niche market worth less than $5 billion and serviced by a handful of companies. If regulation promotes natural catastrophe modelling into a mainstream and critical function across multiple industries the market could be worth $50 - 100 billion or more.

Urge you to read the full article accessed via link below.