Putting The “Green” Back Into Greenbacks With Climate Fintech.
Author: Alex Lazarow
Climate change is causing new insurance needs. For instance, businesses face interruption risk due to a climate event like a hurricane, or flood. Risks are not entirely black or white – think the ski hill in warmer winters or the ice cream vendor in colder regions who might not shut down their operations but simply host less visitors. Here, parametric players are emerging to fill the gap. Descas (a portfolio company at the fund I work with) leverages satellite data and AI to better predict and price emerging climate risks to businesses for business insurance. Sensible Weather offers embedded climate insurance for the travel space.Credit providers face new types of risk due to climate change. Like insurance, credit providers will be concerned about asset values because this impacts collateral. For instance, a home mortgage provider – whose loan is backed by the value of the underlying home – will now need to factor totally new climate event risks, including total loss in the event of unprecedented fires, hurricanes or other natural phenomena.