Despite the challenges, it is our core belief that risk-transfer mechanisms can become a true pillar for climate resilience. Insurance (of any type) protects investors, organizations and countries against the threats of severe weather and climate exposure and provides capital buffering to support climate adaptation and resilience. Moreover, parametric insurance and weather-derivatives can be used to cover Business Interruption and reduction of demand, protecting infrastructure from the impacts of more-frequent weather-related events that traditional indemnity does not cover. As climate change drives more interest in mitigating and hedging risk exposure, insurance-linked products are mainstreamed into the market, offering uncorrelated returns to institutional investors.
Our team has been supporting insurance services for more than 10 years. We run sophisticated catastrophe models to provide PML estimates for setting insurance premiums and apply probabilistic frameworks for assessing losses from more frequent threats, that insurance companies may use for their deductible estimates.