Underwriting Risk

The potential costs of climate change places greater pressure on insurers to identify, understand and manage the risks. To do this we need to make greater use of longer term climate projections. To cope with any increase in claims insurers will need to hold more capital reserves – requiring an increase in premiums.

Like many general insurers, catastrophe models are one of the tools we use to determine risk in property insurance, particularly in relation to flooding, windstorms and sea surge.

This is used to inform pricing levels, capital reserves and how much re-insurance is purchased.

We have been refining this process, taking regional risk forecasts and breaking the data down to the postcode level. This provides greater accuracy in predicting risks and adds value for our customers.