MSCI announced that it is working with Swiss Re Reinsurance Solutions to enhance the financial sector’s ability to assess, manage, and mitigate physical climate risk.
The collaboration integrates MSCI’s GeoSpatial Asset Intelligence with Swiss Re’s proprietary natural catastrophe and climate risk data to provide asset-level insights for financial institutions.
The initiative aims to help clients develop comprehensive strategies to assess and mitigate physical risks across individual assets, private and public companies, global portfolios, and loan books.
By combining Swiss Re’s risk assessment capabilities with MSCI’s location-based intelligence, MSCI says that the partnership seeks to provide financial institutions with more detailed risk evaluations.
A report from Swiss Re noted that the previous year, marked by an average global temperature 1.54°C above pre-industrial levels, was on track to become the hottest year recorded.
The warming climate has contributed to an increase in natural catastrophes, with global insured losses surpassing US$135 billion as of current estimates. The United States and Europe have borne the brunt of these losses, driven by hurricanes, severe thunderstorms, and significant flooding events.
Combined insured losses from major hurricanes are expected to remain below US$50 billion, while severe convective storms (SCS) in the US added more than US$51 billion to global losses, making 2024 the second-highest year for SCS losses after 2023’s US$70 billion.
Ali Shahkarami (pictured above), global head of P&C solutions at Swiss Re, said the company remains focused on providing accurate data and physical risk insights to the market.
He added that the collaboration supports financial institutions globally and aligns with Swiss Re’s objective of strengthening resilience against climate risks.
As financial institutions increasingly seek to incorporate climate risk assessments into investment and lending decisions, partnerships like this may offer insurers and investors more refined tools for evaluating exposure to natural catastrophe risks.
What are your thoughts on this story? Please feel free to share your comments below.
