Global advisory and broking firm, WTW has incorporated climate data into its broking property renewals to help clients understand their long-term risks relating to their property portfolio.
The data enables the assessment of future exposures to climate change by evaluating a series of key climate indicators which helps companies to optimise their risk management strategies.
When the indicators are identified, they can contextualise climate change and compare an organisation’s climate metrics, including how increased extreme weather may impact their portfolio by 2050.
The key indicators include:
- Extreme Heat = An increase in the periods of abnormally hot weather. This indicator can be assessed by the number of days where the temperature is above 30 degrees.
- Rainfall = an increase in heavy rainfall can be assessed by the number of days with more than 20mm of rain.
- Fire weather risk = These are assessed using the Fire Weather Index (FWI), a meterologically based index used worldwide to estimate fire danger. The higher the fire weather index, the greater likelihood that meterological conditions could trigger a wildfire.
John Merkovsky, Head of Risk & Analytics, WTW, said: “When analysing the property portfolio of a client, it is essential to provide data on climate related issues which can impact on property assets. This enables Risk Managers to have an overview of both today and mid-century assessments of potential future risk across their risk portfolio.
“We are leading the way in the use of data and analytics to help organisations optimise their risk mitigation strategies by providing bespoke assessments of their property risk portfolio and the impact of climate change. This is just the beginning of the Climate Analytics and Risk Management capabilities we will be introducing as part of our evolving broking proposition.”
This new approach to evaluating property risk and renewals is being launched initially with large North America clients. WTW plans to expand and roll this out to further geographies and other organisations over the course of 2023.
The broker has also recently announced a strategic collaboration with global law firm Clyde & Co to strengthen its climate risk management offerings.
According to the firm, this collaboration aims to assist clients in effectively managing the impact of physical climate risks and transitioning to net-zero emissions.
