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Risks

Climate Change

Marsh Re’s Climate offering brings you an integrated range of services designed to address multiple facets of physical risks related to climate change, while leveraging the power of other Marsh businesses to also tackle all aspects of risk.

Creating Solutions for Insurers in a Changing Climate

At the end of 2024, global insured catastrophe losses exceeded $100 billion for the fifth year in a row. An evolving physical risk landscape coupled with population increases in more prone regions has required insurers to become significantly more sophisticated in their approaches to understanding catastrophe risk.

Companies developing and integrating robust climate change strategies into their risk management can benefit from the comprehensive offering at Marsh Re and across the Marsh enterprise. Our suite of climate advisory and modeling services supports insurers overcome the uncertainty of a changing climate and balance risks with opportunities in the near, medium, and long-term time horizons. 

Contact Us

  • Josh Darr

    Head of Global Peril Advisory

    Chicago, US

    Josh.Darr

    Kieran Bhatia

    Head of Climate Change - Americas

    New York, US

    Kieran.Bhatia

  • Sandra Hansen

    Head of Climate Change - International

    London, UK

    Sandra.Hansen

    Katy Reyner

    Climate Change Regulatory Lead

    Dubai, UAE

    Katy.Reyner

Quantifying Climate Change Outcomes

As the insurance industry adapts from educating to quantifying climate change outcomes, Marsh Re has released a suite of climate change products. These are available to aid in regulatory responses, industry benchmarking, underwriting strategies and risk management decisions. 

Marsh Re Climate Products

Catastrophe Model Adjustments

Provides probabilistic quantification of physical climate change risk, using catastrophe modeling tools suitable for different emissions scenarios and warming levels. This informs the financial impact of climate change on your portfolio to fulfil regulatory requirements and support exposure and risk management strategies.

Education

Marsh Re has a global team of climate scientists and regulatory experts equipped to understand the impacts of climate change for the insurance industry. Marsh Re publishes briefings on the latest science, regulatory requirements, market conditions and the implications for the insurance industry, and offers training and advice to support our clients in understanding this important topic.

Risk Ratings

Global risk rating products form multiple perils. These provide location level loss metrics in present and future climate to inform underwriting and exposure management decisions.

Model Evaluation and Suitability for Present Climate

Marsh Re can support clients with understanding how well catastrophe models represent the climate risk today.

In addition, Marsh Re offers a number of proprietary US hazard scores in present and future climate:

  • Severe Thunderstorm

    Marsh Re’s county-based risk score offers a holistic view of US severe convective storm (SCS) events. The SCS future climate risk score leverages the recent trends in environmental conditions conducive to tornado, hail, and extreme wind events to project future SCS risk.

  • Wildfire

    The climate-adjusted wildfire risk score provides a comprehensive view of wildfire risk and helps clients quantify risk across multiple levels, including risk selection, rate-making and strategic growth. The climate-adjusted wildfire risk score leverages downscaled climate models to project future risk at multiple time slices and emissions scenarios.

  • Sea Level Rise

    Marsh Re’s proprietary United States and Caribbean Sea Level Rise Risk Score offers a transparent approach to modelling rising sea levels. To better understand which locations are at the highest risk of coastal flooding in the future, multiple time horizons and emissions scenarios are considered.

  • Hurricane

    Marsh Re’s climate-adjusted Tropical Cyclone Risk Score combines several complex datasets using a transparent methodology, providing clients with a high resolution, model agnostic view of wind risk from tropical cyclones for multiple emission scenarios, ensemble metrics, and time slices.

Register for event updates from the Marsh Re CAT Resource Center

Here

Marsh Re Climate Change Toolkit

Our Marsh Re climate change tools enable clients to quantify the physical impact of climate change on their modelled losses, based on scientific insight. This supports regulatory requirements, reinsurance and underwriting decisions, and internal risk management strategies.

Types of Climate Change Risks and Impacts

  • Physical Risks

    In the insurance context, physical risks are direct damage to insured assets by weather and climatic events. Climate change is increasingly influencing the frequency and severity of natural catastrophe perils, with physical climate risk exacerbating both acute and chronic threats.

  • Transition Risks

    Transitioning to a lower-carbon economy may entail extensive policy, legal, technology, and market changes to address mitigation and adaptation requirements related to climate change.

Marsh Enterprise

Spanning the Marsh Enterprise

Working in tandem with Marsh Risk, Oliver Wyman, and Mercer, Marsh Re is also able to provide services that span several other climate-related areas. These services include transition risk modeling, climate investment portfolio modeling, asset-level resilience surveys and scoring, supply chain modelling and commercial due diligence.

By applying a combination of modeling techniques, proprietary risk assessments and the latest in scientific research, you can prioritize your climate-related activities, while also benchmarking the success of your approach against industry peers.

More on Marsh Solutions

Questions To Ask About Your Climate Change Strategy

Survey: Market Attitudes on Climate Change

Marsh Re conducts an internal survey every year of all its brokers globally, to assess how climate change is impacting reinsurance renewal negotiations. We gathered almost 300 responses, with findings across different themes:

  1. Quantification of climate risk: The number of insurers quantifying their climate risk has increased particularly in Europe and the UK, but less than half of global respondents are quantifying their climate risk.
  2. Perils: For the majority of regions, a wide range of perils were cited as of concern. Flood is a key peril of interest in relation to climate change in both Europe and Asia Pacific. There is also a focus on severe thunderstorm following significant hail events in Europe and activity in the US.
  3. Market actions: Markets are taking a wide range of actions in relation to climate change, from pricing and capacity decisions, to increased retentions, higher attachment points and exclusion of fossil fuel intensive activities. Over time, this could worsen the problem of unaffordable insurance and increase protection gaps, suggesting that there is still work to be done to properly understand and more effectively manage changing risk.
  4. Disclosure requirements: The request for additional disclosures from carriers also more than quadrupled, from 4% in 2021 to 20% in 2024, particularly around fossil fuel percentages in treaty programs in line with EU Taxonomy regulations. Regulatory disclosure requirements, including quantification of climate risk, are accelerating, for example with the introduction of United States National Association of Insurance Commissioners (NAIC) climate filing requirements from 2025.
  5. Ongoing engagement: Even if climate change did not directly influence negotiations at renewals, these discussions typically occur throughout the year as part of ongoing relationships, rather than at renewals.

Survey results are collected annually to track the evolution of market expectations around climate change. 

Resources: Understanding Climate Change Risks

Quantifying Hail Risk for Informed Underwriting and Accumulation Management

Read more

Navigating Climate Risk Management Challenges in Saudi Arabia

Read more

Insight to Action: Leveraging Advanced Analytics for Wildfire Risk Management and Resilience

Read More

A Century of Floods in China—Historical Patterns and the Evolving Drivers of Loss

Read More

From Engineering Dominance to Integrated Resilience—China’s Flood-Management Transformation

Read More

The Intensifying Urban Flood Threat—Building Financial and Physical Resilience in China

Read More

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