Risk Management Solutions Inc (RMS) has expanded its partnership with global speciality reinsurer Canopius to develop and strengthen the latter’s climate change risk analysis using RMS Climate Change Models.
This extends the existing relationship between the two companies as Canopius has previously integrated the models into its North Atlantic business processes concerning hurricane wind and storm risk.
As a catastrophe risk solutions company and subsidiary of Moody’s Corporation, RMS helps insurers, financial markets and corporations manage risk from natural and man-made catastrophes, including hurricanes, earthquakes, floods, climate change, cyber and pandemic risk.
RMS Climate Change Models will ensure Canopius’ compliance with new and emerging regulatory reporting and financial disclosures, as they are designed to improve reinsurers’ understanding, evaluation and management of climate change risk across multiple regions by implementing a probabilistic modelling approach.
The models employ comprehensive and flexible parameters to adjust Representative Concentration Pathways (RCPs) to assess the impacts and uncertainties of different climate change scenarios.
Joss Matthewman, senior director of product management at RMS, explains: “Rigorous and reliable climate change risk analytics are vital for all businesses right now. This is not just about contributing to increased regulation and financial disclosures, but also providing clients with strategic insights and outcomes for short-, medium- and long-term horizons.
“We are pleased to continue our work with Canopius, and we see more companies across the insurance and reinsurance industry defining best practices around climate change and investing in the future of our industry,” Matthewman continues.
Paul Wilkinson, head of aggregation and risk strategy at Canopius, adds: “Climate change presents one of the most significant risks to the reinsurance industry.
“It is important to us to incorporate the latest science relating to climate change into our risk analytics in a manner that can be tailored to our needs and fully integrated across key business operations, such as portfolio management, near-term underwriting, and business planning.
“The RMS models enable adjusting time horizons for the near- and long-term, which, combined with the full flexibility and range of the RCP scenarios, allows us to confidently assess North Atlantic hurricane climate change risks,” he concludes.
