Business

Guy Carpenter launches new climate advisory and modeling services

The group used catastrophe modeling tools suitable for different future time horizons and warming assumptions and geographic accumulations of risk and/or underwriting

Guy Carpenter has announced it is launching a suite of climate advisory and modeling services in a bid to help companies develop and integrate “robust” climate change strategies into their Environmental, Social and Governance programmes.  

It comes as the group warned of the increased frequency and severity of natural catastrophes, with physical climate risk creating “both acute and chronic” threats. It added that a shift to a lower-carbon economy is “spawning multiple transition risks”, and a failure to manage transition exposures is generating the potential for liability risks. 

In light of this, it has established an integrated range of services designed to address multiple facets of physical and liability risk. 

The key services include:

  • Physical risk modeling – natural hazard risk assessment and risk modeling, exposure data enhancement, adjustment of catastrophe models
  • Risk governance and regulation – capital modeling and solvency capital requirement calculations, regulatory compliance processes
  • Risk transfer – traditional risk transfer, parametric instruments and catastrophe bonds
  • New institutional arrangements – advice on public risk transfer solutions and public/private partnerships
  • Insurance solutions – risk underwriting for new technologies and infrastructure

The group used catastrophe modeling tools suitable for different future time horizons and warming assumptions, geographic accumulations of risk and/or underwriting, to enable companies to quantify the impacts under potential climate scenarios on the overall volatility and tail risk of their insured portfolio. 

The firm said clients can prioritize climate-related activities, while also benchmarking the success of their approach against industry peers by applying a combination of modeling techniques, proprietary risk assessments and the latest scientific research. 

Peter Hearn, CEO, Guy Carpenter, said: “The myriad challenges resulting from climate change have initiated action, with early adopters seeking to demonstrate best-in-class responses to these issues. 

“To reach that level, clients must gain clarity around critical areas such as their physical exposure to climate risk, how they manage transition risk, how they address potential liability risk, and how they underwrite towards greener outcomes.” 

Dean Klisura, president, Guy Carpenter, added: “Managing climate risk is becoming an increasingly prominent component of an organization’s overarching Environmental, Social and Governance approach, with the majority of our clients expressing a strong desire to develop robust strategies on this front. 

“As the direct impacts of a shifting climate reverberate through our industry, Guy Carpenter is working to provide our clients with the foundations necessary to build resilience, ensuring that they are in turn able to deliver for their clients during this transformative period for our planet.”

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