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Catastrophe Reinsurance Set to Soar After Year of Extreme Weather

Natural catastrophes caused an estimated $115 billion in 2022, according to the Swiss Re Institute, with $50-$65 billion of that from #HurricaneIan alone. That’s nearly 50% above the 10-year average of $81 billion, and part of a steady 5-7% rise in insurable losses each year acording to the Financial Times.

That means a lot of pain for reinsurers like Swiss Re, which cover the risk for the insurers themselves. And that, in turn, means the cost of property catastrophe insurance is set to go up next — way up. British investment bank Peel Hunt estimates the cost may rise 30% in 2023, while Lloyd’s of London parent Beazly believes it could soar as much as 50%. As a result, the market for reinsurance is grinding to a halt as reinsurers and brokers tussle in repricing risk, with Aon’s top reinsurance executive warning of “friction and uncertainty.”

Clearly, this is no longer business as usual. As the soaring cost of reinsurance ripples through property markets, real estate in Florida and elsewhere will be repriced in tandem, while more resilient regions will look increasingly attractive in turn.

Our tools help reinsurers and investors alike understand the new realities of resilient geographies and arrive at the “Climate Price.” Visit www.climatealpha.ai to learn more about how we can help you in the year ahead.

#climaterisk #creditrisk #reinsurance #riskmanagement #climateadaptation #catrisk

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9 in 10 Large Companies Have Assets Located in the Path of Climate Hazards

Nine in ten of the world’s largest companies have at least one asset exposed to climate risk, according to S&P, and more than one-third of those companies should expect that asset’s value to drop by 20 percent or more. But where are those assets? And over what time frame? Esri covered new data from S&P Global Sustainable1.

The geospatial information experts at Esri recommend combining spatial analytics with #GeoAI to understand the intersection of climate risks and business operations. “What are the revenue impacts of closing a store that’s vulnerable to wildfires?” Esri’s Alexander Martonik asks. “How will customer spending change if we move a distribution center out of a region with worsening hurricanes?”

These are the right questions, but answering them will not only require climate and business data, but also a fine-grained understanding of adaptation efforts — how will local public- and private actors move to mitigate those risks? That’s where Climate Alpha comes in, bringing its unique tools to bear in helping customers refine their geospatial analysis to account for human intervention. Visit Climate Alpha’s Product Suite to learn more about how our SaaS offerings can help refine and enrich geospatial forecasts of the future.

#realestate #climateadaptation #climaterisks #riskmanagement

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