During the recent InsureTech Connect conference, Pranav Pasricha, global head of P&C Solutions for Swiss Re, made this observation while talking about property insurance innovations:

“Irrespective of our political views, [given] what has happened with Ida, [and] the central European flooding in July, Queensland floods, Japanese floods, historic wildfires—I don’t think anybody would disagree that we were going through unprecedented climate change. And many of you probably will not disagree that traditional industry cat models have kind of let us down.”

It turns out that there are plenty of people who disagree with his first statement.

Just days before Pasricha spoke, I wrote an article about an industry report on climate change. Struggling for the right combination of words that would draw readers in, I chose this simple opening sentence: “While events like Hurricane Ida and a Texas winter freeze demonstrate wide-reaching impacts of climate change to all but ardent deniers, even insurers and reinsurers may not fully appreciate all the risks, a new report suggests.”

Comments from readers about my article were swift and critical.

“Wow. So now anyone that has a different opinion is an ‘ardent denier,'” one commenter began.

“Does the author know that the world was warmer in 1100 AD than it is now (without 6 billion people)? Keep up the scare tactics,” he concluded.

Well, actually, “the author”—that’s me—was just reporting the contents of a global broker’s report in her article, “Climate Change Impact: 40% Chance of ‘100-Year Storms’ Over 20-Year Span.” And no, it’s not my math. The writer of the comment ending, “Can we stop the climate change propaganda?” can take up his arithmetic complaint with the authors of the report, “The Journey to Net Zero: An Insurer’s Guide to Navigating Climate Risks and Opportunities,” from Willis Towers Watson and investment management firm Wellington Management.

These discussions do get heated, don’t they?

Pasricha and I were premature in assuming that the climate of thought around climate change had shifted.

I don’t wish to open a debate on climate change here. Rather, for those who believe that it is real and negatively impacting insurers and their customers, I draw attention to Pasricha’s final comment—that traditional catastrophe models haven’t painted a full picture of what’s going on.

A flip through the pages of the fourth-quarter edition of Carrier Management magazine and a glance at our cover tells you where I’m going with this. Geospatial information systems, bringing together aerial and satellite images with AI and analytics, can supplement the analyses from existing catastrophe risk models.

“We’re going not from the ground up but from the cloud down—not to disrupt or replace what’s there now but to complement it and enable everyone to access high-quality flood data—and now disaster capital through our insurance partners,” says Bessie Schwarz, the CEO of Cloud to Street, a group of scientists who use satellite imagery and AI to analyze flood events that traditional models miss.

Helping to attract disaster capital is James Rendell, the CEO of BirdsEyeView, an MGA that uses Earth observations from satellites to structure parametric insurance for climate change risks impacting small and midsize businesses.

CM’s Virtual Roundtable, “Seeing Through the Clouds: Satellites in Insurance,” is available for viewing on the Carrier Management channel of InsuranceJournal.TV.

Panelists are:

Moderated by:

Mike Fitzgerald, Principal Analyst, Insurance, CB Insights

Rendell and Schwarz participated on a CM roundtable about GIS uses and possibilities moderated by Guest Editor Mike Fitzgerald last month.

This edition’s articles about the roundtable and profiles of GIS vendors highlight other uses too: automating property inspections, improving pricing and speeding claims responses to cat-impacted customers (p. 31-51)

Back in July, Fitzgerald, principal insurance analyst for CB Insights, told me he wanted to focus on GIS because the topic deserved a lot more attention than it’s been getting. “I don’t want to overstate, but it’s like when the Internet or the smartphone came along,” he said, pushing the idea.

Last year, when someone asked my opinion of a topic that’s not getting enough attention, my answer was ESG initiatives—the “E” part of which involves insurer investment and underwriting responses to climate change.

In this edition, we bring the two ideas together.

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