The latest report of The Geneva Associations “Managing Physical Climate Risk: Leveraging Innovations in Catastrophe Risk Modelling" offers a comprehensive review of developments, opportunities and value proposition of Cat models for many sectors and applications.
Catastrophe risk modelling has revolutionised the way insurers assess, price and manage disaster risks. Its usefulness to society could be even further enhanced by integrating the latest climate science, observational capabilities and emerging technologies.
The report builds on insights and practical experiences from leading international experts and offers three overarching recommendations for enhancing Cat modelling, including:
1. Six areas to leverage and enhance current Cat modelling methodologies to extend the value for (re)insurers and the public sector
2. Embedding latest climate science in Cat models for improving modelling of physical climate risk with a forward-looking approach, taking into consideration the climate change scenarios, enable companies with integration of extreme-weather risk into core business, investing, disclosure and reporting (linking to FSB-TCFD) and to support new climate insurance product offerings
3. Embracing a systems-based thinking for development of the next generations of Cat models to better understand the feedback loops and cascading effects within and across sectors
Enhancements and innovations in Cat modelling can help many sectors, beyond insurance, to manage these risks more effectively; therefore, the industry should strive to continually strengthen the predictive power of its Cat modelling capabilities with a forward looking approach.
Please follow the links below to download a copy of the report, read the press release and watch a video interview.