Climate casualty risk
Increasingly, climate advocates are turning to the courts to seek accountability and redress, and that means new climate-related emerging risks for casualty insurers. It soon may be on equal footing as other casualty cats, like PFAS and microplastics. Insurers urgently need to assess their climate casualty exposures, which may have the potential to become catastrophe-level losses.
Good news. Our emerging risk platform, CoMeta, now provides robust analytics for climate risks, helping casualty insurers underwrite better and assess their exposures and reserves in the face of a changing climate.
At the core of our climate offering is a set of climate liability scenarios that contemplate a range of climate-induced litigation events that could trigger general liability, D&O, and Workers’ Compensation policies. The scenarios are science-based and also incorporate insights from legal scholarship on the future directions of climate litigation. Each climate liability scenario posits legal causes of action, economic burden estimates, plaintiff damages, implicated commercial activities, specific company settlements, and defense costs that allow insurers to measure how these events aggregate in their casualty books. The information is converted into specific company exposures for 128,000 companies for use in underwriting. CoMeta’s multi-line clash scenario analysis feature makes it easy to monitor and explore cross-line climate liability aggregations and devise strategies for managing exposure going forward.
In addition, our litigation tracker actively tracks all climate-related complaints with commercial defendants filed in U.S. state and federal courts to allow clients to understand new patterns of litigation as they emerge, and identify companies, industries and causes of action that are central to each complaint.
While every insurer models their exposure to climate in property insurance, are they only looking where the light of property cat modeling glows? In the next ten years, casualty exposures may be greater and Praedicat can shine the light.
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