Climate change & climate risk related news

Ceres, a non-profit that leads a national coalition of investors, environmental organisations and other public interest groups working to address global sustainability challenges, has highlighted parametric risk transfer, catastrophe bonds and ILS as innovative tools to address increasing climate risks and build a more resilient and sustainable insurance sector.

Analysts at Citigroup have highlighted a growing financing gap in climate adaptation efforts, saying that as this gap grows and steps to mitigate climate change remain at a pace considered too slow, there will be a need for increasing amounts of capital and catastrophe bonds are a useful structure that can be used in support.

The World Bank has approved the Regional Emergency Preparedness and Inclusive Recovery Program (REPAIR), which is designed to boost financial resilience against climate shocks for Eastern and Southern African countries and leverages private market parametric disaster insurance risk transfer alongside its contingent credit DDO solution.

The Chicago Mercantile Exchange (CME Group) has expanded its range of weather risk transfer products, with the recent launch of seasonal strip weather futures and options contracts.

“Insurance is the financial bedrock needed to de-risk investments and attract the additional capital necessary to mobilise the climate transition,” Rowan Douglas of Howden said today. To meet this goal, with exposure growing fast, there will be a significant need for more insurance capacity, with a role for the insurance-linked securities (ILS) market in delivering […]

Even in a state of increased event activity driven by a changing climate, allocating to insurance-linked strategies (ILS) can generate attractive returns for investors, according to a whitepaper from LGT ILS Partners, the specialist dedicated ILS investment unit of the private bank and asset manager LGT Capital Partners.

Research from the Swiss Re Institute finds that countries are at risk of higher property damage losses as a result of climate change, with the United States and the Philippines likely to be hardest hit as certain hazards intensify.

Lauren Crane, analyst in the Insurance-Linked Strategies team at Neuberger Berman, suggests that the extreme perception of climate change may “present an opportunity rather than a threat” to the ILS market.

The Bermuda Monetary Authority (BMA) has laid out its plans for 2024, with Chief Executive Officer (CEO) Craig Swan highlighting specific opportunities in parametric risk transfer for climate insurance.

Speaking at the World Economic Forum event in Davos, Switzerland this week, Rafal Modrzewski, CEO and Co-Founder of ICEYE explained the important role satellite technology and the data it can collect has for the global insurance and reinsurance market, as well as societal resilience.