Precisely assessing climate risks
Improvement achieved at banks and insurance companies:
- Consideration of climate change scenarios in the forecast of flood probabilities
- Improved portfolio analysis by specifying risk correlations
- Integrated into existing risk systems
Initial situation
BaFin has determined that banks are currently paying more attention to transaction risks than to physical climate risks and plans to examine the consideration of these risks more closely. Credit Agricole has already been threatened with a severe penalty.
Insurance companies also generally only use historical frequencies (e.g. ZÜRS Geo). These assessments do not include climate scenario analyses.
BaFin emphasizes that general ESG scores have too little information value and recommends that financial institutions use specific data on physical climate risks, such as the probability of flooding.
The solution
Our solution combines 3 components:
- Description of water levels due to weather influences - Machine Learning
- House number-accurate damage risks via topography and soil conditions
- Simulation of long-term damage scenarios using internationally renowned climate models
The combination of these components provides an improved, house-number-accurate flood risk forecast.
Let's get into conversation
We would be happy to discuss with you, without obligation, the potential that lies dormant in your company.
Arrange a free initial appointment now
Paul Prins
Managing Director
Email: prins@simcog.de
Phone: +49 175 2128627