Part of a new industry series Insuring the Future™: Climate Risk Intelligence™ for Insurance Services
Executive Summary
Climate change is reshaping insurance profitability and strategy as natural catastrophe losses rise, with insured losses of about USD 108B in 2023, about USD 137B in 2024, and trending toward about USD 145B in 2025. This white paper introduces Climate Risk Intelligence™: the structured integration of climate science, forward-looking hazard projections, exposure and vulnerability data, and financial analytics to complement catastrophe and actuarial models with decision-ready insights across underwriting, reinsurance, claims, and capital planning. It outlines the data foundations, priority use cases (including parametric products, NFIP, business interruption, and insurance-linked securities), and a practical roadmap to help insurers move from reactive loss payment to proactive, climate-aware risk management that protects solvency, supports affordability, and strengthens community resilience.
Climate Risk Is Now A Core Business Driver
Climate change is now a core business driver for insurance, shaping strategy, performance, and long-term profitability. In 2023, natural catastrophes generated about USD 280 billion in global economic losses, of which roughly USD 108 billion were insured, well above the 10 year insured average of USD 89 billion (Swiss Re Institute, 2024). In 2024, insured natural catastrophe losses rose again to about USD 137 billion and are on trend to approach USD 145 billion in 2025, continuing a 5–7 percent annual growth rate in real terms (Swiss Re Institute, 2025; Swiss Re, 2025).
Defining Climate Risk Intelligence™ For Insurance Decisions
This white paper introduces Climate Risk Intelligence™: the structured integration of climate science, hazard models, exposure and vulnerability data, and financial analytics to generate forward looking risk insights for insurance decision making. Climate Risk Intelligence™ does not replace catastrophe or actuarial models; it enhances them by explicitly reflecting how hazards such as flood, wildfire, wind, and heat are changing over underwriting, asset, and capital planning horizons (IPCC, 2021).
A Four-Part Framework And Practical Use Cases
We develop four themes. First, we outline the new climate reality and the full set of stakeholders in the insurance value chain. Second, we define Climate Risk Intelligence™ and the data foundations needed to make it credible and decision ready. Third, we explore concrete use cases—from underwriting and product design to reinsurance, claims, and customer resilience—including parametric weather insurance, the U.S. National Flood Insurance Program, business interruption coverage, and insurance linked securities such as catastrophe and resilience bonds. Finally, we describe how insurers can build the necessary capabilities and technology and provide a practical roadmap and call to action.
From Reactive Payouts To Proactive Resilience
Our objective is to help insurers, brokers, reinsurers, regulators, investors, and communities understand how Climate Risk Intelligence™ can move the sector from reactive loss payment toward proactive, climate aware risk management and resilience building. Insurers that embed Climate Risk Intelligence™ can better protect solvency and profitability, maintain access and affordability, and support more resilient communities in a rapidly changing risk landscape.
Frequently Asked Questions (FAQs)
- What is Climate Risk Intelligence™ in the context of insurance? Climate Risk Intelligence™ is the structured integration of climate science, forward-looking hazard projections, exposure and vulnerability data, and financial analytics to produce decision-ready insights that inform underwriting, pricing, reinsurance, claims, and capital planning.
- How is Climate Risk Intelligence™ different from traditional catastrophe modeling? Traditional catastrophe models rely primarily on historical data and stochastic events, while Climate Risk Intelligence™ explicitly incorporates how hazards such as flood, wildfire, wind, and heat are changing over time, complementing existing models with forward-looking insights.
- Why are insured natural catastrophe losses increasing so rapidly? Insured losses are rising due to a combination of climate-driven hazard intensification, expanding exposure in high-risk areas, higher asset values, and increased vulnerability of infrastructure and communities, resulting in greater frequency and severity of losses.
- How can insurers use Climate Risk Intelligence™ in underwriting and pricing? Insurers can use Climate Risk Intelligence™ to assess asset-level risk under future climate scenarios, refine pricing and underwriting appetite, design parametric and resilience-linked products, and better align premiums with evolving risk profiles.
- What benefits does Climate Risk Intelligence™ provide to insurers and their stakeholders? By embedding Climate Risk Intelligence™ into decision-making, insurers can improve solvency and profitability, enhance portfolio resilience, support regulatory and investor expectations, maintain coverage availability and affordability, and contribute to more resilient communities.
More in the next post on Insuring the Future™: Climate Risk Intelligence™ for Insurance Services…
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