Climate X

An insurance crisis is emerging in the U.S. as natural and climate disasters push insurers out of high-risk states. • Past rate hikes in disaster-prone regions like California and Florida are now causing wider withdrawals, impacting states such as Iowa, Illinois, and Kentucky. • Dave Jones from University of California reports that at least 18 states have experienced significant insurance rate hikes or complete withdrawal of companies. • Jones also suggests a federally funded reinsurance programme to aid state-run ‘fair plans’ and stabilise the insurance market. 👉 https://bit.ly/4cpr1VL #ClimateRisk #PhysicalRisk #Insurance #ClimateResilience #US

New research by Stefano Battiston and colleagues from the University of Zurich - Department of Finance highlights critical flaws in current climate risk assessment techniques. 1️⃣ Simplified data approaches may lead to significant underestimation of financial losses for businesses and investors. 2️⃣ Current climate risk assessments often use simplified and proxy data, potentially underestimating financial losses by up to 70%. 3️⃣ Detailed asset-level data are crucial for accurate risk assessment and climate adaptation planning. The study emphasizes the importance of considering "tail risks" from extreme climate events, which can lead to much higher than average impacts. Full Article 👉 https://bit.ly/3WdPWFC #climaterisk #climatedata #SustainableFinance #finance

National Bureau of Economic Research conducted research on homeowners insurance, finding average premiums have risen unevenly across regions due to local disaster risks. 1️⃣ Premium Increase and Disaster Risk: From 2020 to 2023, homeowners' insurance premiums rose by 33% (13% in real terms), with the increase linked to higher disaster risk, resulting in a $500 premium rise for a one standard-deviation increase in risk by 2023. 2️⃣ Reinsurance Costs Impact: The study finds that the rising reinsurance prices have significantly contributed to the increase in the risk-to-premium gradient, indicating that these costs are passed on to homeowners. 3️⃣ Future Projections: If the reinsurance shock continues, households in climate-exposed areas could see annual premiums increase by $700 by 2053, underscoring the impact of global reinsurance markets on individual household budgets. Full Paper 👉 https://bit.ly/4dATUj0 #climaterisk #us #insurance #realestate

Despite recent progress, the integration of climate risk considerations in banking remains in its early stages. What can we expect in future developments? In our latest article, we explore emerging trends in climate risk stress testing and scenario analysis within the European and UK banking industries, as well as the implications for the role of regulators. Read it now 👉 https://bit.ly/4de4g8B #ClimateResilience #climatechange #climaterisk #finance #sustainability #innovation

Last month's Midwest floods further demonstrate that the nation is not prepared for the increasing threats of climate change. The number of extreme precipitation days — where totals are among the top 1 percent of all events — has grown by about 60% in the Northeast since the 1950s, and by 45% across the Midwest. The article quotes various experts, among which Christine Kirchhoff, associate professor of engineering design and innovation at Penn State University, who said: “Not only are existing dams and other infrastructure not built for such extremes, it’s even hard to keep guidelines for new projects in line with future climate projections”. Furthermore, Lori Cannon, dam safety association’s executive director, added: “risk calculations don’t consider how often heavy rains are falling, and how much more frequently a dam may now be hit with major or near-record storms”. Read the full article 👉 https://wapo.st/3LKzHLm #climaterisk #flood #us #infrastructure #climateadaptation

The United States and Canada share similar physical climate risks due to their geographical proximity. However, local factors such as regional climate and geography - as well regulations - influence real estate valuation in both countries. Learn how climate risks impact property values and mortgage lending in the U.S. and Canada, with our comparative study of the sector. Read more 👉 https://bit.ly/3AfYmVM #realestate #unitedstates #canada #propertyvaluation #mortgage #banking #finance

🚨 Tropical Storm #Debby is unleashing heavy rain across the Southeastern Coast in the US, after initial landfall in Florida’s Big Bend region on Monday morning. Debby has already caused widespread flooding and infrastructure damage across the Southeast. The storm is expected to remain off the coast of South Carolina today before it moves to the Mid-Atlantic and Northeast US. Stay informed and stay safe! 👉 https://bit.ly/3YBNQT8 Image: NOAA National Oceanic & Atmospheric Administration #WeatherUpdate #TropicalStormDebby #ClimateRisk #flooding

Investors strongly urge Wall Street to consider impacts of climate-related risks and opportunities on business profits. Investors have sent a clear message to the financial hub of Wall Street: acknowledging that climate-related risks and opportunities significantly impact business profits, and any efforts to ignore or downplay these factors can hinder sustainable growth and market stability. Amid insurers exiting disaster-affected, unprofitable housing markets, as well as agricultural losses and supply chain disruptions caused by more frequent extreme weather events and climate disasters, investors are now placing a significant emphasis on the risks associated with climate change that could impact their financial gains. Full news article 👉 https://reut.rs/4cU1W6o #ClimateRisk #SustainableFinance #finance #banking #WallStreet #US

In tandem with many jurisdictions around the world, mandatory disclosure of climate-related financial risk is becoming a landmark for sustainability transparency across various industries in Canada, including banking. With the TCFD framework now fully incorporated in the International Sustainability Standards Board’s (ISSB) Standards, the banking sector could face challenges to adjust such as potential disruption to already-developed industry mandates and the need for continuous adaptation to evolving disclosure requirements. Our latest article reviews the status quo of climate-related financial disclosures in Canada, highlighting advancement and potential challenges associated with the transition to the ISSB Standards, and explores the role of regulatory bodies in promoting such evolving disclosures. Read it now 👉 https://bit.ly/3LQRqRC #climatechange #sustainability #finance #climaterisk #physicalrisk

The Bank of England published its fourth annual climate-related financial disclosures. Key points: • The Bank continues to build out its scenario analysis capabilities to assess financial materiality of climate-related factors, including in the context of sovereign bond portfolios. • The Bank is equally taking actions to mitigate climate-related financial risks to residential mortgages posted as collateral with the Bank, and which also constitute over 80% of all collateral. Full Report 👉 https://bit.ly/3yqIdfI #ClimateRisk #ClimateDisclosure #UK #BoE #Banking #finance