Catastrophe & Climate Risk Analytics

A new Capgemini Research Institute report finds that 68% of executives now say their organization actively prioritizes climate adaptation, up from 56% in 2025, yet only 15% have fully quantified the financial impact of climate-related disruptions. The fifth edition of A World in Balance: The resilience reset, based on a survey of 2,100 executives at 701 organizations with more than $1 billion in annual revenue across 13 countries, also shows the share of organizations falling behind on net zero goals rising to 11% in 2026 from 1% in 2025, with 29% saying they have postponed their net zero objectives, compared with just 8% last year. Nearly nine in 10 organizations report climate-related supply-chain disruptions, and more than seven in 10 executives say securing access to critical resources such as energy, water and materials now influences sustainability decisions more than emissions-reduction targets. Sustainability spending reached 1.04% of revenue last year, above the 0.8% initially allocated, and 83% of organizations plan to increase climate adaptation spending over the next 12 to 18 months. Cyril Garcia, Global head of Sustainability services and Corporate Responsibility at Capgemini, said climate disruptions have become the new normal and that leaders can no longer defer climate action.

Today's cabinet meeting (Sept 15) was chaired by Deputy Prime Minister and Transport Minister Phiphat Ratchakitprakarn on behalf of Prime Minister and Interior Minister Anutin Charnvirakul, who is on a trip to the Socialist Republic of Vietnam. The Interior Ministry is seeking approval for a total budget framework of 15 billion baht to buy natural disaster insurance under the national disaster insurance programme, and is proposing three types of policy covering floods, windstorms and earthquakes, for 30 million households, with a one-year coverage period from 1 October 2026 to 1 October 2027, to ease the burden of risk on the state, which spends tens of billions of baht a year on relief for disaster victims. Meanwhile, the Ministry of Agriculture and Cooperatives is seeking approval for a project to improve the irrigation system in the lower Chao Phraya basin and the lower eastern side, with a budget of about 95 billion baht, using loans from the Asian Development Bank, or ADB, together with the national budget. The Transport Ministry, for its part, is proposing to cancel the item for construction of the ministry's new headquarters building, which was tied to the budgets for 2026 to 2028, effectively delaying the construction plan. Attention is also on proposals to appoint and transfer senior officials at several ministries to fill positions left vacant by retirements on 30 September this year.

Verisk's catastrophe modeling unit has released its 2026 Global Modeled Catastrophe Losses Report, calculating that the insurance industry should prepare for $171 billion in average annual insured catastrophe losses, up $19 billion from a year ago and the highest estimate Verisk has reported to date. The benchmark rose even after a year with no U.S. hurricane landfalls for the first time in a decade, driven by exposure growth, rising reconstruction costs, and continued development in catastrophe-prone areas. Of the $171 billion global insured average annual loss, $117 billion, or 68 percent, is attributed to the United States, with severe thunderstorm accounting for 40 percent of modeled risk, ahead of tropical cyclone at 27 percent, earthquake at 10 percent, winter storm at 9 percent, flood at 7 percent, and wildfire at 6 percent. The report also notes that a severe catastrophe year could generate losses nearly three times higher than the global AAL, with modeled aggregate insured losses reaching $477 billion at the 100-year return period and $606 billion at the 250-year return period. Since Verisk first published this report in 2012, the estimated global insured AAL has nearly tripled, rising from $59 billion to $171 billion, reflecting expanded model coverage and growth in insured exposure.

Verisk's catastrophe modelling unit has released its 2026 Global Modelled Catastrophe Losses Report, calculating that the insurance industry should be prepared to withstand $171 billion in insured catastrophe losses on average in a given year, up $19 billion from a year ago and the highest estimate Verisk has reported to date. The benchmark rose even after a year with no U.S. hurricane landfalls for the first time in a decade, reflecting continued growth in property values and insured values worldwide. Severe thunderstorm accounts for 40 percent of modelled insured catastrophe risk, more than any other peril, ahead of tropical cyclone at 27 percent, earthquake at 10 percent, winter storm at 9 percent, flood at 7 percent, and wildfire at 6 percent. At the 100-year return period, modelled aggregate insured losses reach $477 billion, and at the 250-year return period, they reach $606 billion. The report also highlights a persistent protection gap, noting that globally only about 38 percent of economic losses from natural catastrophes are insured, while in Europe, only about $24 billion of the region's $110 billion in expected annual economic catastrophe losses is insured, or 22 percent.

US commercial property insurer FM has acquired FortressFire, a wildfire intelligence company that uses machine learning and physics-based modelling. Financial terms were not disclosed. FortressFire will operate as an independent, wholly owned division of FM, continuing to serve insurers, reinsurers, brokers, real estate professionals, lenders, and property owners under its existing brand and leadership. FM chairman and CEO Malcolm Roberts said the deal reinforces the company's belief in data-driven, location-based risk mitigation, while FortressFire founder Michael Ashker called the acquisition a validation of its science-based approach to ignition prevention.

Climate exposure is increasingly altering the financial calculus of retail properties, moving beyond sustainability to become a core operating-cost and estate-planning issue. Insurance costs for U.S. commercial real estate surged 88% over five years, with MSCI data showing insurance reached 2.4% of income receivable in the 12 months to the third quarter of 2024, double the share five years earlier. However, the broader concern is that location-specific hazards like floods, wildfires, and severe convective storms—which Swiss Re Institute says accounted for 92% of global insured natural catastrophe losses in 2025—can disrupt trading, damage stock, and lengthen recovery times, making a store’s long-term economics depend on total risk rather than rent and footfall alone. Retailers are urged to assess risk store by store, invest in resilience where it matters most, and factor insurance, potential downtime, and adaptation costs into lease renewals and capital-allocation decisions.

The Office of Insurance Commission, or OIC, has launched the CAT Scenarios Stress Test project to assess the impact of natural disasters on the Thai insurance industry at a sector-wide level. Dr. Ayusri Khambanlue, Assistant Secretary-General for Regulatory Standard Development, chaired the opening meeting on July 6, 2026, joined by representatives from the Thai General Insurance Association, insurance companies, and project advisors including TIRD, Milliman, Moody’s, and PwC. The project will develop a stress testing framework using catastrophe scenarios tailored to Thailand’s risk context, covering three main scenarios: a severe 1-in-200-year flood event, a 1-in-200-year earthquake event, and a combined flood and earthquake occurring within the same year at a 1-in-100-year severity level. It will also assess impacts on financial positions, liquidity, and recovery paths over a three-year period. The project is divided into four phases and is expected to be completed by December 2026. The OIC expects the results to enhance risk management knowledge, strengthen the stability of the Thai insurance system, and support the development of proactive supervisory tools to cope with large-scale disasters in the future.

Allstate estimates its June catastrophe losses at $1.72 billion, or $1.36 billion after tax. Combined with estimated catastrophe losses for April and May, second-quarter catastrophe losses will total approximately $2.88 billion, or roughly $2.28 billion after tax. The June 2026 figure is significantly higher than the June 2025 estimate of $619 million, or $489 million after tax.

A Florida man had his roof torn off by Hurricane Milton just two months after paying off his home, and he had no homeowner's insurance to cover the damage. Mike Parrot told WFLA News that he and his wife had paid off their Bradenton home about two months before the Category 5 storm hit in October 2024, ripping the roof off and leading to the house being condemned. The couple had to live in their backyard studio while repairs were made, a situation WFLA reporter Shannon Behnken said she often encounters as homeowners drop insurance after paying off mortgages to save money. Insurify data shows about one in five Florida homes are uninsured, and the state's average annual home insurance premium reached $8,292 in 2025, an 18% increase from the prior year. The report also noted that most standard policies do not cover flooding, and roughly 80% of Florida residential structures lack flood insurance.

Middle-class retirees have only one realistic option in California: Redding, where the median home price is around $400,000, roughly half the statewide median of $775,000. A couple with average Social Security benefits of about $49,700 per year faces a total annual budget of roughly $73,000, including $5,500 for homeowners insurance that reflects surging wildfire premiums. The California FAIR Plan has seen written premiums rise 208% since September 2022, with an approved average rate increase of about 29% starting October 2026, adding $4,000 to $8,000 annually in high-risk areas. After Social Security, the remaining gap of about $23,300 requires a portfolio of roughly $585,000 at a 4% withdrawal rate or $665,000 at 3.5%, assuming a paid-off home. This budget works only in the far north, inland areas like Shasta County, where costs are lower but wildfire insurance remains a critical, often overlooked expense.

Verisk Analytics has added KatRisk's climate-informed catastrophe models to its Model Exchange, expanding the multi-vendor platform with inland flood, wildfire, tropical cyclone, storm surge and earthquake perils. The move broadens independent risk perspectives for insurers and reinsurers amid rising climate-related losses and regulatory scrutiny. Verisk also launched a reengineered U.S. Tropical Cyclone Model on its cloud-native Synergy Studio platform, integrating updated climate science and a new stochastic event catalog for more realistic hurricane risk assessments. The company continues to return capital to shareholders, paying dividends of $195.2 million, $196.8 million, $221.3 million and $251.3 million while repurchasing $1.7 billion, $2.8 billion, $1 billion and $624 million in shares in 2022, 2023, 2024 and 2025, respectively. Verisk recently acquired SuranceBay to expand its life and annuity offerings, and analysts project 2026 revenues of $3.22 billion and earnings of $7.63 per share, reflecting year-over-year growth of 5% and 6.6%.

The climate risk management market is projected to grow from USD 8.59 billion in 2026 to USD 19.08 billion by 2031, at a compound annual growth rate of 17.3%. The growth is driven by regulatory emphasis on climate disclosure and resilience planning, with organizations adopting advanced platforms to manage exposure to climate-related risks guided by frameworks like ISSB and TCFD. Geospatial intelligence and scenario-based modeling are crucial, especially in North America, which is expected to hold the largest market share by 2026, and the fast-growing Asia Pacific region. Key players such as IBM, Deloitte, and Moody's are advancing platform capabilities with integrated geospatial and climate intelligence solutions.

MSCI announced it is acquiring physical climate risk modeling company First Street. The deal is expected to close in Q3 of this year with MSCI paying $120 million at closing, plus potential future payments if certain revenue thresholds are met in the first two years after closing. Following integration, MSCI will be able to run physical climate risk assessments for over 2 billion structures. First Street will sit within MSCI's sustainability and climate business.

Carlyle Group is introducing a new climate risk framework for its $475 billion portfolio at London Climate Action Week. The framework, developed with insurance broker Marsh and backed by institutional investors including Mubadala and Sampension, provides portfolio managers a four-step process to assess asset exposure to extreme weather, measure resilience gaps, calculate loss reduction from upgrades, and use those findings to negotiate better insurance terms such as premium credits and lower deductibles. Steve Hatfield, Carlyle's co-head of global sustainability, said the goal is to shift from reacting after damage to pricing resilience before storms, floods, droughts, or heat exposure hit asset values. Several major institutional investors have already shown interest, and leading insurance carriers are expected to road test the framework in coming months.