2025 Begins with Unprecedented Climate Challenges for Insurers

The start of 2025 has been marked by a series of extreme weather events and natural disasters – from devastating wildfires and earthquakes to record-breaking cold snaps - which are affecting the global insurance sector.

Wildfires Wreak Havoc

Wildfires have become an increasingly common occurrence, and their impact is being felt globally. In the first week of the year, uncontrolled blazes have ravaged thousands of acres of land.

Notably, In Australia, a heatwave in NSW, Victoria and Tasmania over the weekend resulted in continued extreme fire dangers. The Grampians National Park alone saw 76,000 hectares of land destroyed after 21 days of burning.

Meanwhile, in the US, the fast-moving Palisades, Eaton and Hurst fires in the LA area have spread to almost 5,000 acres at the time of writing.

With zero percent containment and an incoming windstorm predicted to bring gusts of up to 160kmph, the wildfires are poised to expand rapidly. These fires have left over 300,000 residents without power and prompted the evacuation of over 37,000 people and threaten to cause even greater destruction in the days ahead.

Arctic Cold Snap in US and UK

In contrast to wildfires, a polar vortex has brought a brutal cold snap to parts of the US and UK. Temperatures have plummeted to record lows in some regions, disrupting transportation and increasing demand for emergency services. In parts of the UK, extreme flooding over the past week has further strained energy systems and forced the closure of numerous businesses.

Earthquake in Tibet

Elsewhere, on 2nd January, a powerful 7.1 magnitude earthquake struck the Tibetan Plateu, causing widespread destruction. At least 126 people have lost their lives, thousands were left homeless and rescue efforts are ongoing with over 14,000 workers deployed to search for survivors.

The Role of Climatic and Nat Cat Analytics In Insurance

These events highlight the pressing need for insurers to better understand, mitigate and price Nat Cat and climate-related risks as well as fully understand their exposure to these types of events.

BirdsEyeView WEATHER ANALYTIX? platform combines probabilistic modelling with real-time climate data to provide detailed insights into weather and NAT Cat risks.

By combining satellite and ground station data, historical climate patterns and advanced analytics, the platforms offers a wide range of capabilities. A few highlights of the system are:

1.??????? Assess Risk Proactively: Model up to 10,000 locations to identify high-risk areas for all weather perils – including flooding, extreme weather, and wildfires.

2.??????? Enhance Pricing Accuracy: Utilise granular climate data to aid setting premiums that reflect actual risk exposure.

3.??????? Exposure Mapping: Map your entire portfolio with our advanced exposure mapping tool. This live aggregate monitoring solution maps global exposures across your portfolio, enhancing risk management and enabling detailed management reporting.

4. Live Alerting System: Stay ahead of weather events with our global hazard altering system. Monitor your portfolio for incoming weather risks and receive early warning notifications, enabling you to proactively inform clients or adjust your underwriting strategy by avoiding certain territories. This tool provides valuable insights and supports timely decision-making.

The increasing frequency and severity of natural catastrophe disasters present ongoing challenges for the insurance industry. WEATHER ANALYTIX? provides critical insights needed to navigate these ever evolving and dynamic risks.

Whether your an re/insurer, broker or MGA, please reach out to discover how we can help you and your clients mitigate these risks.