Allianz Commercial Launches Climate Risk Platform

With increasing impacts of climate change on global businesses and economies, Allianz Commercial, the commercial insurance division of insurance and investment behemoth Allianz, has introduced a new platform to help businesses deal with their climate risk exposures. The platform, branded as Climate Adaptation & Resilience Services (CAReS), presents an integrated system of digital and consultancy solutions to guide companies to gauge, comprehend, and manage increasing risks posed by climate-related hazards.

The transformation is Allianz Commercial's strategic response to the increasingly dynamic climate risk environment, with more frequent and intense natural catastrophes impacting international business. The company cites that in 2024 alone $327 billion worth of losses were inflicted by climate-related natural catastrophes like floods, storms, hail, and wildfires, of which $138 billion were insured loss. These statistics highlight the pressing necessity for companies to re-examine the way they watch, govern, and respond to climate risk.

Michele Williams, Allianz Risk Consulting (ARC) Global Head at Allianz Commercial, highlighted the reality of climate threats and how these impact various industries holistically. "The question is not whether a company is impacted by future climate risks but when it will occur," Williams indicated. No industry is exempt from such hazards as floods, drought, storms, or fires. We all recall catastrophic impacts of such disasters like the LA wildfires or hurricanes in the US. Businesses are disrupted, and economic and insured losses are mounting into hundreds of billions of US dollars annually.

CAReS has been built to tackle these issues head-on. A main feature of the site is a self-service electronic application that enables companies to take physical climate risk and convert it into measurable financial and business metrics. The application enables organizations to quantify their risk exposures at portfolio and individual location levels with more precision in terms of where and how exposed they are.

The other distinctive aspect of the platform is its dashboard level view, which provides dynamic climate risk scores for 12 key climate-related perils such as tropical storms, floods, wildfires, hail, and extreme heat. The platform enables businesses to evaluate risk on four different time horizons: today, 2030, 2050, and 2080. This enables businesses not only to quantify their current climate exposures but also to extrapolate how these risks will develop over a period of decades, allowing long-term decision-making to be improved.

Aside from digital analytics, CAReS also possesses a strong consultancy component to assist companies in taking practical action towards climate resilience. This entails on-site inspection, specialist location vulnerability assessment, and critical evaluation of particular climate risks. These are carried out to create tailored risk reduction and mitigation plans, assist firms in minimizing potential operational downtime, and assist with mandatory or voluntary climate-related financial disclosure.

Michael Bruch, Allianz Commercial Global ARC Advisory Services Head, emphasized the strategic benefit over the horizon of forward-thinking climate risk management. "Resilience is a journey, not a destination," said Bruch. "Proactively managing climate risks enables you to reduce the potential disruption to your business and get ahead.". This is a win-win agreement for Allianz Commercial as a insurer, and for the client who is able to mitigate its climate risks and future losses.

Application of CAReS is just one aspect of a larger movement across the insurance sector as a whole, whereby firms not only insure climate risk but also directly help their customers to prepare for and adapt to it. As physical climate changes increase in frequency and reach, products such as CAReS may become increasingly vital to firms with a stake in creating operational resilience and protecting investment.

Through the union of real-time risk evaluation, future-oriented climate modeling, and specialist consultancy, Allianz Commercial's CAReS plans to emerge as a go-to partner for companies operating in an increasingly hot world. By doing so, the insurer hopes to support the pivot away from recovery after disaster and towards proactive risk reduction, thus rewriting the business approach to managing climate risk for decades to come.