As the global financial system confronts the accelerating and often unpredictable impacts of climate change, a strategic collaboration between data analytics leaders Verisk and S&P Global Energy is poised to revolutionize how institutions measure and manage future risk. This partnership introduces a sophisticated analytical tool, described as “insurance-adjusted climate risk intelligence,” meticulously designed to address a profound gap in the financial, insurance, and investment markets. By establishing a unified framework, this initiative offers for the first time a clear, quantifiable assessment of both the insured and uninsured financial losses that will stem from future climate-related events and near-term natural catastrophes, thereby setting a new industry benchmark for comprehensive risk evaluation.
The Urgent Need for a New Approach
The escalating frequency and sheer intensity of catastrophic natural events have resulted in record-setting financial losses across the globe, starkly revealing the limitations and inadequacies of existing risk assessment models. This has created an immediate and critical demand for more robust, forward-looking, and scientifically grounded analytics that can accurately price the risks of a changing climate. The collaboration between Verisk and S&P Global Energy directly targets this market void, providing a strong, auditable, and scientifically sound foundation for a wide range of institutions to manage their climate-related risks with a degree of precision that was previously unattainable. This joint solution moves beyond historical data, offering a proactive lens through which to view future exposures and build more resilient operational and investment strategies in an increasingly volatile world.
This push for innovation is not solely a market-driven phenomenon; it is also a direct response to intensifying pressure from regulatory bodies, investors, and the emerging central bank stress tests that are becoming a standard part of financial oversight. These new requirements have consistently highlighted a significant deficiency in conventional climate risk assessments: the general failure to integrate insurance data and properly differentiate between insured and uninsured losses. Without this crucial distinction, institutions are operating with an incomplete and potentially misleading financial picture, making it nearly impossible to fully comprehend their true exposure to physical climate hazards. This critical analytical gap has made it clear that a new, more integrated approach is necessary for achieving both regulatory compliance and genuine financial resilience.
A Groundbreaking Collaboration for Future-Proofing Finance
The mechanics of this strategic partnership are built upon a sophisticated, two-way integration of proprietary data and advanced modeling platforms from both companies, creating a powerful synergy. In the first direction of this data exchange, Verisk contributes its physically based, near-present climate catastrophe risk data for direct integration into S&P Global Sustainable1’s Climanomics physical climate risk platform. This integration is a pivotal step, as it will fundamentally enhance the platform’s ability to distinguish between insured and uninsured losses resulting from climate change. By filling this critical analytical gap, one that has been specifically identified by financial regulators, the combined tool provides a more complete and actionable understanding of climate-related financial risk, empowering users to make more informed decisions regarding capital allocation and risk mitigation strategies.
In the second direction of the collaboration, S&P Global Sustainable1 provides its climate-adjusted inland flood data, which will be incorporated into Verisk’s highly detailed event simulations. This process will generate a groundbreaking dataset of future-projected climate events, which are being modeled for the first time with projections extending from 2026 to 2050. This forward-looking dataset will be delivered through Verisk’s flagship catastrophe risk modeling platform, Touchstone®, enabling insurers and other financial entities to translate the often abstract and long-term impacts of climate change into tangible, quantifiable projections of flood event intensity and insurable losses. This capability allows for more precise estimations of future changes to portfolio risk profiles due to the evolving climate, moving the industry from reactive analysis to proactive risk management.
Actionable Intelligence for Key Industries
This newly integrated risk intelligence empowers clients and market participants across key industries to more effectively anticipate, adapt, and perform in the face of profound climate uncertainty. For the insurance sector, the solution is designed to significantly reduce the inherent uncertainty in underwriting future flood exposures that are being amplified by climate change. It provides leading banks and insurers with a powerful tool to enhance their portfolio stress testing, inform the development of more resilient lending and underwriting strategies, and optimize the allocation of capital against future climate-related risks. By providing a clearer picture of future liabilities, it allows these institutions to better align their business models with the physical realities of a changing world, ensuring long-term solvency and stability.
The finance and asset management sectors also stand to benefit significantly from this collaboration. For banking and broader financial services, the platform directly addresses the mounting regulatory and investor demands for comprehensive climate-risk disclosure and management. By delivering “decision-grade” data and actionable insights, it enables institutions to transition from a compliance-focused, stress-testing posture toward developing effective, proactive risk-mitigation and lending strategies. For asset managers, the integrated solution expands the scope of climate and physical hazards risk analysis, allowing them to optimize portfolios by understanding previously opaque uninsured risks. For instance, a global asset manager can now leverage the platform to identify and mitigate climate-driven risks across its real estate holdings, which supports both regulatory compliance and the long-term creation of value for its stakeholders.
Redefining the Industry Standard
The strategic alliance between Verisk and S&P Global Energy ultimately equipped the market with a credible and auditable foundation for making critical decisions in an era defined by climate uncertainty. By integrating sophisticated data and modeling capabilities, the partnership provided the tools necessary for clients to evolve from a reactive posture of climate-related compliance to one of proactive resilience. The combined solutions empowered leading financial institutions to accurately quantify their exposure to physical hazards, transparently disclose those risks to stakeholders, and proactively manage their portfolios against the long-term impacts of climate change. This initiative established a new industry standard for approaching risk, ensuring that the world’s most critical economic sectors were better prepared to navigate the defining challenge of the twenty-first century.
