As TCFD-aligned regulations mount, digital climate risk solutions are becoming increasingly essential for the insurance and financial service industries. The geospatial data market – which is poised to reach $1.14 trillion by 2030 – offers a valuable tool to enhance climate risk analysis.
Business leaders in the insurance and financial service industries are driving the adoption of geospatial climate data. For insurance firms, this unique insight is pivotal in developing climate-resilient products, providing essential future projections of both chronic and acute physical climate risks over the short, medium and long term. This geospatial data is also integrated into analytical models to inform premium pricing, risk selection and loss estimation.
Financial firms can use geospatial climate data to optimize their assessments of physical climate risk exposure and calculate value at risk accordingly. The insights provided also allow decision-makers to investigate and identify climate-related investment opportunities.
As yet, few geospatial data providers have fully committed to the climate risk market, but offerings are available from several pioneering vendors. Geospatial data firms that get in front of this dynamic emerging market – and organizations that implement their innovative solutions early on – stand to gain a valuable competitive advantage.
