Climate risk is already on the balance sheet
Understanding it before it aggregates is critical for underwriting, pricing and capital allocation.
For insurers and reinsurers, climate risk is not emerging - it is already embedded in performance. Unlike many industries where climate risk is indirect, insurance is directly exposed through claims, underwriting performance, portfolio aggregation and capital allocation.
Insurers must move from understanding risk at the point of claim to understanding risk across the portfolio - before events occur.
Where Climate Risk Sits in Insurance
Insurance exposure is inherently linked to the real economy
Location Risk
Where policyholders are located
Activity Risk
What activities they undertake
Aggregation
How exposure accumulates
Correlation
How risks correlate geographically
Multi-layered risk profile
Physical Risk
Impacts asset damage, claims and loss ratios
Geographic Concentration
Drives aggregation risk
Sector Exposure
Introduces transition and insurability risk
The Structural Challenge
Most insurers hold strong internal data on policies and claims. However, this data is often not structured to support forward-looking climate analysis.
Common Challenges
This creates a reactive operating model - exposure is understood after events occur, aggregation becomes visible too late.
Why This Matters
Without a structured view of climate exposure, insurers face increasing pressure:
Over time, this affects both profitability and resilience.
How NCED Supports Insurance & Re-Insurance
NCED enables insurers to link environmental risk directly to business entities and portfolios, providing a consistent, entity-level dataset.
Key Workflows Enabled
Underwriting Enhancement
Incorporate climate indicators into underwriting decisions
Portfolio Aggregation Analysis
Understand how exposure accumulates across portfolios
Forward-Looking Risk Monitoring
Track changes in exposure as conditions shift
Reinsurance Strategy
Support decisions around coverage and capital allocation
Regulatory & Governance Reporting
Provide consistent evidence for climate-related disclosure and oversight
Strategic Impact
NCED enables insurers to move from:
From
To
For insurers, climate risk is already a financial reality. The advantage lies in understanding that risk before it aggregates - NCED provides the foundation to do so.