The UK insurance industry is under mounting pressure to effectively predict the longer-term impacts of climate change as flood risk accelerates and record losses are recorded. Over 600,000 additional properties could be categorised as high risk from flood by 2100, and 60% of the increase in flood risk by 2040 will occur in defended areas where the failure of one flood defence could impact thousands of properties at once. Motor insurance providers are also under pressure, with 60% of flood-damaged vehicles written off and motor flood claims accounting for almost a fifth (19%) of all flood-related claims in October 2024, according to recently released data from a leading insurer.
Climate Change Datasets
Responding to the growing demand for a multi-decade view of flood risk for pricing, solvency, strategy and regulatory compliance, LexisNexis® Risk Solutions, the data, advanced analytics and technology provider to the insurance market, has launched new climate change flood datasets. This information will help insurance providers maximise their ability to visualise and integrate climate change risk scores directly into their workflows, helping them to model future risk scenarios with greater accuracy, price with precision and reduce exposure. Ultimately, the new offering is designed to help insurance providers remain sustainable and continue to offer coverage for consumers impacted by a changing climate.
‘What if’ Scenarios
Property and motor insurance providers can now analyse the future flood risk for a single address, vehicle location or a whole book of business over a choice of intervals up to the year 2100, based on the four main RCPs. These climate change scenarios were developed by the Intergovernmental Panel on Climate Change (IPCC) to show how the climate might change depending on how much emissions are cut or continue.
Streamlined risk assessment and planning
Insurance providers will have the choice to access climate change data via LexisNexis® Informed Quotes – a single point of entry to a wide array of real-time data enrichment and via LexisNexis® Map View – the geospatial intelligence data visualisation tool, so they can more easily visualise how climate change could impact their current books of property and motor business.
Caroline Elliott-Grey, senior product manager, LexisNexis Risk Solutions, said: “The demand for granular, forward-looking climate change data has never been greater. Insurance providers are seeking ways to model future risk scenarios and reduce their Annual Average Loss. What they need is a long-term view of flood risk to support portfolio management, climate stress testing, resilience planning, claims forecasting and product innovation. These new datasets from two of the leading providers of flood modelling provide property-level insights that go far beyond postcode-level analysis, delivered into their workflows to help insurers make smarter decisions in pricing, underwriting, and risk mitigation.
“With climate change expected to increase the frequency and severity of flood events, and single-day rainfall events likely to put unprecedented strain on flood defences, the need for advanced data solutions is urgent for insurance providers and their customers. LexisNexis Risk Solutions is committed to supporting the insurance industry with tools that not only enhance risk assessment but also contribute to broader ESG goals and community resilience.”
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