One Concern And WTW Partner To Increase Adoption Of Parametric Insurance
27, June 2022
One Concern And WTW Partner To Increase Adoption Of Parametric InsuranceOne Concern, a climate risk analytics software provider, has announced a partnership with WTW, a global insurance advisory and brokerage firm. Integrating One Concern’s climate resilience scores into WTW’s client-facing analytical platforms will enable clients to evaluate climate risks to their physical assets and dependent infrastructure. WTW clients will gain a more holistic view of their risk profile and can then execute climate resilience planning. Additionally, incorporating thorough climate risk analysis from One Concern will accelerate the uptake of parametric insurance and reduce basis risk in traditional property insurance. WTW and One Concern are partnering as market demand for climate risk visibility increases, following the incorporation of the TCFD requirements into regulations across the world.
One Concern has an innovative digital twin covering the US and Japan which evaluates physical climate risks to assets, taking into account how surrounding infrastructure is affected to more accurately predict operational downtime and identify which assets will be the first to fail. The firm’s model covers hazards including flooding, wind and earthquakes. Founded in 2015, One Concern will be looking to both expand the geographical coverage of its digital twin and to add further hazards and dependencies, such as water and wastewater, to the firm’s portfolio.
The increasing impacts of climate change on weather events and electricity and water infrastructure continue to be seen with heat waves across India and Pakistan. The extreme heatwaves started in March and are now pushing into June, contributed to at least 90 deaths and aggravated water and electricity shortages. According to the World Meteorological Organization, heatwaves across this region are 30 times more likely this year due to climate change. Additionally, heat waves in the US this week are expected to hit over 100°F/38°C for 20% of citizens, and Californian state officials have warned that extreme heat and other impacts of climate change will threaten the reliability of the state’s electric grid, with outages highly likely for the next five summers.
In light of increasingly frequent extreme weather events and subsequent infrastructure shortages and high financial losses, firms are looking to improve their resilience to climate risk and other low frequency high severity events. Although insurance providers such as Munich Re and Swiss Re offer in-house digital tools to calculate asset exposure to physical climate risks, partnerships between multiple software providers in combination with services firms will be key for providing clients with a cross-sectional understanding of climate risk. For more information on how firms can improve their climate resilience, why it should be a priority and digital solutions to invest in, check out one of our latest reports: Strategic Focus: Improving Climate Resilience With Digital Solutions.