Underwriting is complex. Climate change is not making it easier
© [M] Munich Re [P] SDI Productions / Getty Images

Underwriting is complex. Climate change is not making it easier

Unless you can reliably factor in the risks from natural disasters caused by climate change

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    Successful underwriting in the insurance industry differs from less successful underwriting primarily in the ability to price risks correctly. With climate change, your risks are increasing as natural disasters become more frequent, less predictable and often cause significantly higher losses.

    A detailed understanding of natural hazards and climate risks is the solution to ensuring that your underwriting decisions reflect physical climate risks. And do so over the entire term of your exposure, preferably without the need to make readjustments if an unprecedented event occurs.

    Location Risk Intelligence supports you with the most up-to-date and high-quality data based on the latest scientific findings and the experience of over 50 years in the assessment and evaluation of natural disasters and the effects of climate change.

    US$ 1,000,000,000

    The entire industry is struggling with the impacts of climate change. In 2023, a new annual record was set with 45 catastrophic events causing damage of at least US$1 billion or significantly more. *

    *Source: Munich Re NatCatSERVICE, Status, January, 2024
    Underwriting is complex. Climate change is not making it easier
    © Munich Re

    Make your 5 most important key tasks your top 5 success factors

    Selecting risks is becoming increasingly difficult because as an underwriter you have to consider more numerous and increasingly complex influencing factors in order to remain successful.

    The sheer volume of data to consider slows down processes, and there is often a lack of clarity about which data is relevant and which can be ignored. A data-driven risk assessment tool can be instrumental in enhancing human judgement, guaranteeing your long-term success.

    Location Risk Intelligence reliably provides you with up-to-the-minute data based on the latest scientific findings, and presents it in a variety of visualisations so that you can clearly interpret even complex risk data, and use it immediately to make far-reaching risk-related decisions.

    When technical pricing is used as a benchmark for price suitability, distorted decision parameters such as customer and competitor behaviour can influence the "real" price. Under these circumstances, knowing your real risk exposure is critical to making profitable pricing decisions in the future, too.

    Location Risk Intelligence provides you with powerful tools based on scientific findings to analyse physical risks caused by natural hazards and climate change, and to consider their financial impact.

    This enables you to offer your clients attractive offers despite the increasing risks of natural disasters, while at the same time taking into account the consequences of climate change. A competitive advantage you should not miss out on.

    Particularly in large portfolios with thousands of assets, the riskiest ones can only be identified with the greatest meticulousness and corresponding effort. And due to climate change, risks that were previously classified as safe can often change within very short periods of time.

    However, using the latest risk models and software tools, such as those included in Location Risk Intelligence editions, risks can be identified much earlier. Qualitative and quantitative predictions can then be made about the risk exposure of individual assets or entire portfolios with up to 5 million locations, enabling you to tailor your exposure to your risk appetite.

    Capacity optimisation is another essential factor that plays a key role in underwriting and determines your success. 

    You can ensure that the sum of your risks is in line with your risk strategy by using the tools of Location Risk Intelligence to analyse your portfolios against the latest and most scientifically sound climate risk data. This enables you to identify high-risk exposures and replace them quickly and easily where necessary. 

    In this way, you ensure the success of your company and remain as competitive as possible in a rapidly changing environment.

    When determining your coverage, it is important on the one hand for you to offer a broad spectrum to differentiate yourself from your competitors. On the other hand, however, you need to avoid over-accomodation as not to impair your performance.

    By integrating scientifically sound natural disaster and climate risk data you can make your product range much more precisely focussed, and thus stay ahead of the competition.

    Location Risk Intelligence with its analysis and evaluation tools offers you exactly this possibility. By identifying climate risks for individual physical addresses as well as for entire portfolios, classified and weighted according to a wide range of hazard scores, and interpreting them quickly and easily using the integrated data visualisation, you can present your clients with attractive offers that also take into account the effects of climate change.

    Benefit from one of the world's leading providers of climate risk data.

    The Natural Hazards Edition is an essential part of our daily work. In underwriting, a detailed assessment of exposure is more necessary than ever due to the increasing threat of natural disasters. A reliable assessment of exposure to natural hazards is crucial for making informed decisions regarding the acceptance of a risk, including risk commensurate loss prevention measures and pricing.
    Peter Sprang
    Head of Department Property Large Corporate and International Business
    ERGO Versicherung AG

    Better decisions, better business!
    Book your live demo right now.

    Make your underwriting process more efficient and accurate
    with Location Risk Intelligence

    Increase efficiency
    Location Risk Intelligence helps to automate the process of assessing risks and issuing policies. It provides easy and intuitive data access via web applications or API data integration for the further use of risk data in your own business systems. This enables you to process more claims in less time and so increase productivity.
    Full coverage of natural catastrophe and climate risks gives you all the data you need to make decisions. Premium data quality that you can rely on in your decision-making increases underwriting accuracy, optimises risk selection and improves profitability. This minimises the risk of misjudgement and enables you to make more informed decisions.
    Underwriting software can help ensure that decisions and guidelines are applied consistently. Munich Re has long-standing expertise in understanding and assessing the risks of natural catastrophes and climate change.
    Data analytics
    Through global data coverage, we provide you with consistent data sets that take into account current and future risk exposures, enabling you to make risk-sensitive short-term as well as long-term strategic decisions.

    How Location Risk Intelligence Platform and its editions support you in your underwriting operations
    © Munich Re

    How Location Risk Intelligence Platform and its editions support you in your underwriting operations

    Munich Re’s Location Risk Intelligence is a modular SaaS solution that enables you to understand, measure and manage risks from natural hazards and climate change - worldwide. 

    The following editions are of particular interest for your underwriting needs, as they allow you to generate up-to-the-minute climate-related data for individual sites or entire portfolios, documenting the related exposure to these risks based on scientific evidence.

    The platform supports you in particular in incorporating climate-related effects in your decision-making in order to present your customers with attractive offers that take natural disasters as well as climate change and its consequences into account.

    By entering individual locations or uploading entire portfolios into the Location Risk Intelligence Platform, you can easily analyse, visualise, compare and document natural disasters and climate risks in the form of meaningful reports. The modular platform not only allows you to identify your current and future climate risks, but also to consider the financial impacts of climate change.

    This is the ideal solution if you wish to reliably evaluate the current exposure of portfolios or individual locations to a comprehensive collection of natural hazards. In addition to the comprehensive overall risk score, which is based on the three individually accessible detailed scores for earthquake, storm, and flood, you receive dedicated ratings for a total of 12 natural hazards.

    This edition will help you not only to understand the exposure of assets to current physical risks, but more importantly to analyse and assess the physical risks associated with climate change in a wide range of future scenarios. 

    Considering both acute and chronic climate risks, this edition provides information on eight climate hazard scores. And unlike the Natural Hazards Edition, the risk scores are not only calculated on the basis of past events, but also include projected changes in the intensity and frequency of future events under different climate scenarios.


    Embrace the future with confidence, powered by Location Risk Intelligence's data-driven insights. Book your demo today to start risk-aware underwriting.