AUS - Climate Hazard and Risk Analysis at the Property Level: A New Frontier for Australian Bankers, Insurers and Investors
As climate change causes an increase in frequency and severity of natural disasters such as bushfires and floods, forward-thinking Australian businesses will put climate-related risk management at the top of their agendas. CoreLogic’s Dr Pierre Wiart writes that the businesses with a sophisticated way of quantifying hazards and risk exposure – right down to the individual property level – stand to gain a considerable advantage.
If you work in financial services, insurance or government, chances are you understand the critical role that a changing climate plays in business, to our customers and the community - both now and into the future. Phenomena like rising sea levels, coastal erosion, bushfires and floods present a major risk, with potential impacts ranging from reduced asset value and credit losses to financial losses due to damaged property and infrastructure.
While no one knows exactly what tomorrow will bring, access to the right data can provide a strong foundation for informed decision-making in uncertain times. Business leaders and decision makers, for example, may be better equipped to assess climate hazards when they have data that drills down to the level of individual properties. For the first time, through CoreLogic’s strategic partnership with global reinsurer Munich Re, these types of game-changing insights are available in Australia and New Zealand. Read on to discover an example of the latest climate hazard and risk exposure insights for Victoria, and how having this information could benefit your business and customers.
Quantifying Victoria’s climate hazard and risk exposure
Leveraging our partnership with Munich Re, CoreLogic conducted a deep dive into Victoria’s climate hazard and risk exposure. We analysed 2.5 million residential properties to assess their individual climate hazard ratings and risk scenario outcomes.
The research modelled a range of climate risk scenarios and outlined Victoria’s hazard profile and overall risk level for properties exposed to bushfire, drought, precipitation and sea level rise. It quantified the value and volume of properties exposed to different climate hazards and assigned standardised risk ratings.