PriyaPatel
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TLDR:
- Climate change poses challenges for insurers due to unpredictable risks
- Insurtechs are developing new technologies to help insurers manage climate-related risks
The article discusses the impact of climate change on the insurance industry and how insurtechs are supporting insurers to address the challenges posed by evolving climate-related risks. Climate change has made it harder to insure certain risks as historical data is no longer reliable for predicting the future. Insurtechs supported by programs like Lloyd’s Lab are developing innovative solutions, such as the use of satellite imagery for risk assessments and parametric insurance models, to help insurers manage climate change risks.
Lloyd’s Lab has been focusing on insurtechs with climate change-based propositions, aiming to enable insurers to “insure the uninsurable” by providing new insights and ways of understanding risk. The article highlights the growth of parametric policies as a popular solution for addressing climate change risks, with examples of insurtech companies like FloodFlash and Previsico using this model to assess and address flood risks.
The article also emphasizes the importance of new data and an “experimenters’ mindset” in cracking emerging climate-linked risks. It discusses the need for more private-public partnerships and greater interaction between the public and private sectors to address the rising flood challenge, as well as the role of external data in supporting insurers and their customers effectively.
In conclusion, the article underscores the critical role of insurtechs in supporting insurers to navigate and adapt to the evolving landscape of climate change-related risks, and the importance of embracing new technologies to future forecast and manage these challenges.
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