Cytora and Mitiga Solutions: Climate Risk Intelligence
Cytora, a leading digital risk processing platform, has partnered with Mitiga Solutions, a provider of science-based climate risk intelligence.
The collaboration aims to enhance insurers' ability to assess future exposure to extreme weather events, leveraging Mitiga's EarthScan platform through Cytora's risk processing system.
The partnership comes at a crucial time when climate change poses an increasing threat to businesses, and new regulations require insurance companies and their clients to disclose their climate risk exposure. By integrating EarthScan's asset-level climate risk intelligence data into Cytora's platform, insurers will be able to make more informed decisions about risk assessment and pricing.
Climate risk assessment has become increasingly complex in recent years. According to the National Oceanic and Atmospheric Administration (NOAA), 2023 saw 28 separate billion-dollar weather and climate disasters in the United States alone, with total costs exceeding US$92.9bn. This trend of increasing frequency and severity of extreme weather events highlights the need for more sophisticated risk assessment tools in the insurance industry.
EarthScan, Mitiga's on-demand climate risk analysis platform, utilises advanced data modelling, machine learning, and state-of-the-art climate science to help companies analyse, report, and act on their exposure to various climate risks. These risks include flooding, drought, and extreme temperatures, across different climate scenarios and over decades-long timeframes.
Underwriting Precision
The integration of EarthScan into Cytora's platform will provide underwriters with immediate insights into the climate risk exposure of both individual assets and large portfolios comprising hundreds of thousands of assets.
This capability is particularly valuable given the increasing unpredictability of weather patterns and the need for more granular risk assessment.
Juan de Castro, COO at Cytora says: "With the impact of climate change more apparent year on year, it is increasingly difficult for insurers to accurately determine the level of climate risk a business has. Through partnerships like this one we are delivering on our commitment to make sure insurers have access to the most cutting-edge data and insights available to make faster and more accurate risk evaluations and decision-making."
The collaboration between Cytora and Mitiga Solutions is part of a broader trend in the insurance industry towards more data-driven decision-making. A report by Swiss Re Institute found that the global protection gap for weather-related risks reached US$222 billion in 2022, up from US$171 billion in 2021.
Technological Advancements in Climate Risk Modelling
The partnership leverages significant technological advancements in climate risk modelling. EarthScan's platform combines high-resolution climate models with machine learning algorithms to provide more accurate predictions of climate-related risks. This approach allows for the incorporation of complex climate dynamics that traditional risk models often struggle to capture.
Alejandro Marti, co-founder and CEO at Mitiga Solutions says: "This partnership is the latest step in our mission to make the world a more resilient place under a changing climate. We are excited to work with Cytora so that the state-of-the art in climate science and data modelling is available to insurers through Cytora, meaning smarter, more informed decisions on climate risk without the need to be a climate scientist."
The integration of EarthScan into Cytora's platform is set to influence how insurers will handle climate risk. By providing more accurate and detailed climate risk assessments, insurers will be better equipped to price policies, manage their portfolios, and develop new products tailored to the evolving needs of businesses in a changing climate.
This partnership is the latest in a series of collaborations for Cytora, which has been expanding its data ecosystem for insurers. The company has also recently announced a major collaboration with Chubb and expanded its partnership with Arch to North America.
