New data hub offers financial oasis against climate-related hazards
A new global data community aimed at expanding the climate risk adaption strategies for the insurance and investment markets has launched this week (5 June), to protect economic losses incurred through damages to infrastructure during natural disasters.
The Oasis HUB has been backed by funds totalling €11m from the European Union’s (EU) Horizon 2020 platform and the public-private innovation partnership Climate-KIC. The hub will act as a data platform to open-up the catastrophe risk modelling market, enabling insurers, financiers, academics, businesses and policy makers to respond to natural hazards and protect finances tied into infrastructure assets.
Oasis HUB’s chairman Dickie Whitaker said: “Traditionally, the wealth of data models produced within academia and the modelling community have not been made widely available to the organisations needing them most. Also, prohibitively high costs have prevented “black box” data from the catastrophe modelling market incumbents from being employed on a wide scale.
"Now, with Oasis Hub as a gateway, scientific theory and data can be made focused and actionable, to meet the huge market demand for climate risk adaption strategies.”
Total economic losses associated with property and infrastructure damages derived from natural disasters have cost, on average, $180bn annually over the last decade, 70% of which are uninsured.
The hub aims to provide the insurance industry with a clearer understanding of these risks to mobilise capital through the rapid integration of transparent and affordable data. The Oasis HUB believes the model will be extremely prominent in Asia, where the insurance protection gap is highest.
Don’t look back in anger
The Oasis community was formed in 2011, and draws assistance from partners including Lloyds of London, Swiss Re and the World Bank. The next three years will see the hub build partnerships to overcome barriers related to sharing data, before it begins to pool resources into an online platform to inform relevant sectors.
Commenting on the launch, the European Commission’s head of unit climate action Andrea Tilche said: “The Oasis project is a good example of how knowledge and information on climate change may be translated into innovative services, providing effective means to make societies more resilient to climate-related risks.
“The project also promises to show how an approach based on open science and innovation can deliver results that would be hardly achievable without the free sharing of knowledge among different communities.”
The scales have tipped in recent months as to how the investor and insurance sectors view climate risks. A report revealed that 60% of the world's biggest investors are taking steps to protect their portfolios, while the world's largest investor, BlackRock, warned that high-level directors could be voted out of companies that are failing to mitigate climate-related risks posed to individual firms.
In fact, a rushed transition to clean energy triggered by extreme weather events linked to global warming "will be very expensive" to swallow for the economy, with investors fearing that the next financial crisis will be climate-related.