Since 2023, insurers have been required to report on climate-related risks. Climate risks impact both sides of the balance sheet. For insurance liabilities, the question is: how climate-sensitive are the general insurance portfolios? For investments, it’s essential to assess their vulnerability to climate change. This encompasses a wide range of issues—from the physical impact of flooding on real estate to the effects of anticipated environmental policies on the market value of shares in the energy sector.

Quantifying these climate risks is complex. To assist with this, Arcturus has developed the Green QRT Tool. This tool provides risk scores across investment categories, countries, and sectors for factors like fossil fuel exposure, environmental risk, technology, and market sentiment. With these scores, we generate an indication of transition risks within investment portfolios. The same approach applies to general insurance portfolios: the tool assesses premium sensitivity to climate risks by sector and country.

The Green QRT Tool is highly useful for reporting (QRTs S.06.04 and S.14.02), and the results also offer a valuable starting point for further research into your organisation’s climate strategy.

Contact the Arcturus team for more information. 

Would you like to translate climate scenarios into insights for your own insurance portfolio? Or are you looking for effective reinsurance solutions or proactive damage prevention advice for policyholders? To support these needs, Arcturus has developed the Flood Model, which incorporates climatological insights into risk modelling.

This model uses a climate scenario and detailed meteorological data as inputs, along with specific details from an insurance portfolio: object characteristics and insured values per address, linked to specific landscape locations. The model operates in two stages. First, a chosen climate scenario is translated into flood risk probabilities for each location in the Netherlands, whether from river overflow or heavy rainfall. Long-term data series from KNMI, Rijkswaterstaat, Water Boards, and the European Severe Weather Laboratory inform the probability distributions, providing flood probabilities and maximum water depths for each 25 m² area. In the second stage, the model calculates the impact on each insured object. Based on the insurance coverage, adjustments can be made—for example, isolating the risk of rainfall.

Arcturus can conduct these calculations on your behalf, enabling impact analyses for ORSA scenarios, mapping risks within the insurance portfolio, and supporting the implementation of measures to enhance insurability.

Contact the Arcturus team for more information.

As a sustainability partner, Arcturus has developed a hail risk model based on the European Severe Weather Database and local weather services in the Netherlands, Germany, and Belgium. This tool enables you to assess the impact of climate scenarios on insured hail damage for your insurance portfolio.

The model operates in two steps. First, it creates a probability distribution for future hailstorms—frequency, form and extent, and hailstone size (related to temperature)—for each region in the Netherlands, based on data and the chosen climate scenario. By including data from Germany and Belgium, the risk model also accounts for events just across the border that may contribute to the risk profile of border regions. In the second step, an insurance portfolio is entered, including information on locations, object characteristics, and insured values. Simulations are then generated, and for each simulation, an impact assessment of the damage costs is calculated for each insured object. The overall results produce a probability distribution of hail damage costs. This allows simulation of current portfolio damage costs under various climate scenarios projected for 2050 or 2100.

Arcturus can conduct this analysis for you, allowing you to apply it in impact analyses for ORSA scenarios (materiality analyses) or premium models, and also to provide preventive advice to policyholders. By offering a broad range of natural catastrophe risk models, Arcturus supports insurers in gaining better control over climate risks, helping clients keep future risks affordable.

Contact the Arcturus team for more information.

Due to climate change, the frequency of dry and warm weather is expected to increase in the Netherlands, raising the risk of wildfires. Currently, many Dutch insurers may not see this as a major climate risk, but climate change is likely to increase the impact of this risk, with significant regional differences. As a result, the relevance of wildfire risk for insurers will grow substantially; significant insurance risks in forested areas could greatly increase the variability of damage claims. To address this, Arcturus has developed a wildfire risk model that simulates the likelihood of a wildfire and the extent of the affected area for each nature area in the Netherlands. This enables the risks for an insurance portfolio to be mapped effectively.

Arcturus can conduct these calculations for your insurance portfolio. The model’s results provide insights into the portfolio’s risks, which can also be used in impact analyses for climate scenarios within the ORSA. With this new model, Arcturus expands its growing range of natural catastrophe models, further enhancing our support for clients.

Contact the Arcturus team for more information.