Managing climate risks in a less insurable world: why choose an independent expert?
In a world where climate change is profoundly transforming our economic environment, the question is no longer whether your organization will be impacted, but when and how !
Floods, droughts, heatwaves: these extreme events are on the rise, making some assets simply uninsurable. Faced with this reality, choosing your partner to assess and manage your climate risks becomes strategic.
Climate risk management: a methodical approach
As with any operational risk, climate risk management follows a proven methodology:
- Accurate identification of risks
- Quantification of their potential impact
- Development of an appropriate management policy
- Implementation of concrete reduction strategies
- Continuous validation and updating of exposures
This rigorous approach requires in-depth expertise and, above all, flawless objectivity.
However, today, many organizations are turning to their insurers to conduct their climate exposure assessments. However, this practice raises a fundamental question: can one be both judge and jury ?
Conflict of interest at the heart of the current system
Imagine for a moment:
- Would you accept an organic label certified by the company that manufactures the product?
- Would you trust a study on the harmfulness of a product funded by its manufacturer?
- Would you follow the recommendations of a financial advisor who only offers products that pay him?
The answer seems obvious. Yet, that's exactly what happens when an insurer assesses your climate risks and then uses that same information to adjust your premiums, change your coverage, or decide to no longer insure you.
The gradual demutualization of climate risks
The fundamental principle of insurance is based on risk pooling. However, we are observing a worrying trend: insurers are applying demutualization when it comes to excluding the most exposed assets, while maintaining pooling to increase premiums for all policyholders. Many municipalities are no longer able to find an insurer or are seeing their calls for tenders go unanswered. Businesses and individuals are facing increasing coverage refusals.
This situation is all the more worrying as the Caisse Centrale de Réassurance (CCR) is planning to create an "Insurability Observatory" which, paradoxically, could accelerate the phenomenon of uninsurability by identifying more and more risk areas.
It should be remembered that the French CatNat system is based on a principle of national solidarity: all policyholders contribute to the funding via a mandatory surcharge on their contracts, and the State assumes a significant portion of the risk via the CCR. The insurer is therefore not alone in bearing the financial burden of natural disasters.
Independence: guarantee of objective analysis
Faced with these challenges, climate exposure and vulnerability assessments are becoming an essential strategic tool. They not only help anticipate potential damage, but also, more importantly, enable the adoption of preventive measures tailored to each specific situation.
The crucial question then becomes: to whom should we entrust this mission?
- To your insurer, who has a direct economic interest in assessing your risks?
- Or to an independent expert, whose sole mission is to provide you with an objective analysis and concrete solutions?
Tardigrade AI: independent expertise serving your resilience
It is to meet this need for independence and expertise that Tardigrade AI has developed, in direct collaboration with companies, the first truly actionable climate vulnerability diagnosis .
Our approach is distinguished by:
- Complete independence from the insurance sector
- A rigorous scientific methodology
- Concrete recommendations adapted to each identified risk
- Global coverage of climate risks
- Tailor-made adaptation solutions for each organization
Preparing for the future in a less insurable world
In a context where insurability is becoming a major issue, anticipating and adapting to climate risks is no longer an option but a strategic necessity. Organizations that are able to implement effective adaptation strategies, based on independent and rigorous assessments, will be the ones that will transform this constraint into a competitive advantage.
CEOs, risk managers, CSR directors: adapting to climate change is now a pillar of your organization's sustainability. Don't let those who have a vested interest in overestimating your risks decide your adaptation strategy.
Contact Tardigrade AI to discover how our independent expertise can help you build true climate resilience, beyond simple scores and biased assessments.
Frequently Asked Questions
What is a climate-agnostic vulnerability assessment and how does it differ from an assessment carried out by an insurer?
A climate-agnostic vulnerability assessment is a comprehensive analysis of climate risks conducted by an expert with no ties to the insurance industry. Unlike an insurer's assessment, which can be influenced by commercial interests (premium adjustments, coverage changes), an independent assessment like the one offered by Tardigrade AI guarantees complete objectivity. Our rigorous scientific methodology accurately identifies your vulnerabilities and provides concrete recommendations without conflicts of interest.
How does the phenomenon of climate uninsurability affect businesses and how can we prepare effectively?
Climate uninsurability—a situation in which certain assets become impossible to insure due to their exposure to climate risks—is intensifying with the increase in extreme events. Businesses are facing coverage denials, higher deductibles, or specific exclusions. To effectively prepare for these risks, it is essential to:
1. Carry out an independent vulnerability diagnosis
2. Implement targeted adaptation measures,
3. Diversify your risk transfer strategies beyond traditional insurance
4. Integrate climate resilience into your long-term strategic planning.
What are the most common climate risks for organizations and how can they concretely impact operations?
Major climate risks include floods, droughts, heatwaves, storms, and coastal flooding. Their tangible impacts on operations are numerous: damage to infrastructure and equipment, business interruptions, supply chain disruptions, rising energy costs, access difficulties for employees and customers, and impacts on staff health and productivity. These risks can also affect your reputation, legal and regulatory obligations, and your ability to obtain financing or insurance.
How do I assess the return on investment of climate adaptation measures for my organization?
The ROI of climate adaptation measures is calculated by comparing implementation costs with expected benefits. These benefits include: reduced direct and indirect losses from claims, savings on insurance premiums, avoided business interruptions, asset value preservation, and competitive advantages. Tardigrade AI quantifies these elements in its diagnosis, allowing investments to be prioritized based on their effectiveness. Our approach projects risks and benefits over several decades, taking into account future climate scenarios for an accurate and scientifically based ROI calculation.
What is the difference between climate change mitigation and climate adaptation, and why should my business invest in both?
Mitigation aims to reduce greenhouse gas emissions to limit the extent of climate change, while adaptation involves adjusting your operations and infrastructure to cope with already unavoidable climate impacts. Your business should invest in both approaches because:
· Mitigation meets increasing regulatory requirements and stakeholder expectations,
· Adaptation protects your assets and operations against risks that are already present and will intensify,
· An integrated approach often creates synergies and co-benefits,
· Both strategies are necessary to ensure the long-term viability of your organization in a climatically unstable world.
How does Tardigrade AI's scientific methodology differ from other climate risk assessment approaches?
Tardigrade AI's methodology is distinguished by four major innovations:
1. A site-by-site analysis using GPS coordinates rather than generic scores, integrating the local specificities of each asset,
2. The use of high spatial and temporal resolution climate models, calibrated on the latest scientific data,
3. A multidimensional approach that assesses not only exposure to hazards, but also the specific sensitivity of your assets and your adaptive capacity,
4. Actionable recommendations, prioritized and accompanied by detailed cost-benefit analyses. This scientific rigor guarantees precise and actionable results, unlike standardized approaches on the market.
Which economic sectors are most vulnerable to climate risks and why?
Sectors most vulnerable to climate risks include:
1. Agriculture and agri-food, directly impacted by changes in temperature and precipitation,
2. Real estate and infrastructure, exposed to extreme events and devaluation linked to climate risks,
3. Tourism, sensitive to changes in climatic conditions and the degradation of ecosystems,
4. Energy, facing production and distribution challenges during extreme events,
5. Transportation and logistics are vulnerable to infrastructure disruptions. Each sector has specific vulnerabilities that Tardigrade AI analyzes in detail, providing a deep understanding of the risks specific to your industry and organization.
How can I effectively integrate climate resilience into my company’s overall strategy?
Effectively integrating climate resilience into your business strategy requires a systematic, five-step approach:
1. Carry out a complete independent diagnosis that quantifies your exposures and opportunities,
2. Integrate climate risks into your governance by designating clear responsibilities at management level,
3. Incorporate climate projections into your long-term investment decisions (location, facility design, acquisitions),
4. Develop a scalable and flexible adaptation plan that adjusts to new scientific data,
5. Proactively communicate your approach to investors, clients and employees.
This approach transforms climate constraints into a differentiating strategic advantage and sustains your business model in a context of growing climate uncertainty.