Climate Change

Guy Carpenter 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 McLennan businesses to also tackle all aspects of risk.

Counter the Catastrophic Risks of Climate Change

Companies looking to develop and integrate robust climate change strategies into their overarching Environmental, Social and Governance (ESG) programs will benefit from the power of the Guy Carpenter and Marsh McLennan enterprise, along with our suite of climate advisory and modeling services.

Contact Us

  • Josh Darr

    Head of Global Peril Advisory

    Chicago, US

    Kieran Bhatia

    Head of Climate Change - Americas

    New York, US

Quantifying Climate Change Outcomes

As the insurance industry adapts from educating to quantifying climate change outcomes, Guy Carpenter is releasing a suite of climate change risk scores for US perils. These risk scores are available to aid in regulatory responses, industry benchmarking, and underwriting strategies. 

Guy Carpenter Products

overhead graphic of hurricane pattern

Laser-Focused on Your Region and Perils

Climate change is increasingly influencing the frequency and severity of natural catastrophe perils, with physical climate risk creating both acute and chronic threats. At the same time, the shift to a less-polluting, lower-carbon economy is spawning multiple transition risks.

Guy Carpenter is uniquely positioned to help you understand which perils and regions are most at risk due to climate change. By using catastrophe modeling tools suitable for different future time horizons and warming assumptions, geographic accumulations of risk and/or underwriting, we can enable you to quantify the impacts under potential climate scenarios on the overall volatility and tail risk of your insured portfolio.

business meeting

Spanning the Marsh McLennan Enterprise

Working in tandem with Marsh, Oliver Wyman, and Mercer, Guy Carpenter 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, 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.

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. Impacts: adverse losses, increased volatility, pricing weakness

  • 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.

transparent globe

Leverage the Power of the Marsh McLennan Enterprise

Partnering with Guy Carpenter means benefitting from an advanced suite of solutions across the Marsh McLennan companies.

  • Physical risk modeling: natural hazard risk assessment and risk modeling, exposure data enhancement, adjustment of catastrophe models.
  • Risk governance and regulation: capital modeling and solvency capital requirement calculations, regulatory compliance processes.
  • Risk transfer: traditional risk transfer, parametric instruments and catastrophe bonds.
  • New institutional arrangements: advice on public risk transfer solutions and public/private partnerships.
  • Insurance solutions: risk underwriting for new technologies and infrastructure.

Questions To Ask About Your Climate Change Strategy

Survey: Client Attitudes on Climate Change

Guy Carpenter conducted a client survey in the first quarter of 2021 to assess where the industry is positioned relative to governance, physical climate change risk quantification, disclosure and strategy. We gathered nearly 50 responses, with findings consolidating along 4 different themes.

  1. Strategy: 84% of respondents wanted to start or develop their climate change strategy, citing primarily corporate responsibility and good governance as drivers. This shows there is appetite for clients to improve their understanding and action around this topic.
  2. Internal governance: A majority of respondents said that climate change is a board-level issue, but only 20% are considering climate change holistically with a dedicated individual or team.
  3. Transition risk: Half of companies are exiting the underwriting of thermal coal or other fossil fuel projects, while only 36% do not consider climate change in their investment risks.
  4. Physical risk: Our clients are moving from qualitative assessment to quantitative ones, with 70% of respondents answering that they were quantifying the risk using tools such as adjustments to cat models and stress tests. Rising severity with adverse capital implications, risk accumulations and the potential rising cost of reinsurance were among their key concerns when considering physical risk.

Survey results will be collected on an annual basis to track the evolution of insurance industry expectations around climate change and ESG.

Powering Your Business With Insights

  • Segments

    Offering you specialized expertise that focuses market knowledge, product innovation and analytics on your unique challenges—to provide you with an enduring competitive advantage.
  • Risks

    Bringing together an unparalleled depth and breadth of capabilities and experience to turn your risks into profit and sustained growth.
  • Reinsurance Broking

    Tailoring your solutions to effectively and efficiently match the right capital with your evolving risk profile.