“Companies today are recognizing the need to assess their exposure to climate risk for strategic, regulatory, sustainability, and brand reputation reasons. Swiss Re Corporate Solutions’ Climate Risk Solutions enables corporates to quantify the impact of physical climate risk on their portfolios. A natural starting point for broader climate engagement, climate risk assessment forms an integral part of broader risk and business management.” Jonathan Rake, CEO APAC, Swiss Re Corporate Solutions
Swiss Re Corporate Solutions, the commercial insurance arm of the Swiss Re Group, has launched Climate Risk Solutions for Corporates in Asia Pacific to help companies assess the impact of physical climate risk on their global portfolios.
Underpinning these climate risk solutions is Swiss Re Corporate Solutions’ intuitive and scientifically robust Climate Risk Score Framework. The framework combines forward-looking climate model data for precipitation and sea-level rise with global flood and storm surge zones to create a high-resolution assessment of physical climate risk.
The suite of climate risk solutions offered spans three tiers, from a portfolio overview in the form of a climate risk score report at the entry level, to the provision of risk mitigation and risk transfer options at the highest level of the service offering.
Among the physical climate risk exposures that companies would be able to better assess and understand are river and flash floods (wet), wildfire and droughts (dry), and storm surges and coastal flooding (sea level rise). Identified climate ‘hotspots’ can be further delved into to produce explicit economic loss costs associated with climate change impacts.
Many of these climate ‘hotspots’ are located in the Asia Pacific region, which continues to be disproportionately affected by climate change and secondary perils. As reported in the latest Sigma, the region was hit by 81 large catastrophic events in 2020, suffering over 26% of the global economic losses last year. Insured losses from natural catastrophes were USD 10 billion, representing a USD 53 billion protection gap to the total USD 63 billion in economic losses incurred.
A physical climate risk assessment can help companies identify blind spots and bridge the insurance gap. It is also critical in broader risk management and in safeguarding long-term business interests, including being able to communicate climate-related financial disclosures to customers, investors, regulators and other stakeholders.
