Climate change and weather forecasting

August 26, 2025 4:48 PM

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Climate change continues to increase severe weather events and creates new risks for insurance companies that are often relying on catastrophe models that underestimate risk.

The following stories focus on the impact of natural disasters and climate change, as well as how technology is being used in weather forecasting.

Global insured wildfire losses have surged, Allianz

As the frequency, size and severity of wildfires grow, so does the number of communities and ecosystems impacted by them. According to Allianz Commercial's Wildfires: Emerging Risk Trend Talk 4, global insured losses from wildfires have increased significantly.

Swiss Re data shared in the Allianz report reveals that the global cost of insured wildfire-related losses increased from $8.7 billion in the 2000s to $56.3 billion in the 2010s. Estimates show that only about 5% of wildfires start naturally, and more than 80% of wildfires in the United States are started by humans, Swiss Re shares.

How insurers can get ahead on AI and climate risks

In May, EY and the Institute of International Finance published their second annual survey of chief revenue officers of insurance companies. The survey gets CROs' opinions on several issues affecting the industry, including cybersecurity, third-party risk and regulatory compliance. This year, the survey revealed strategic opportunities for risk management in turbulent times. Digital Insurance spoke with Isabelle Santenac, global insurance leader at EY, about the survey's conclusions, and related issues such as insurers' adoption of AI, climate risk and parametric insurance.

Ascot's head of loss: Weather forecasting, hurricane season

David Larson, U.S. head of loss control & risk management services at Ascot Group, spoke with Digital Insurance about this hurricane season and how tech can impact weather forecasting and natural disaster preparedness.

Keys to using technology for managing weather risks

Climate change, increasingly severe storms, more wildfires and a host of other weather-related events are highlighting the importance of carriers and policyholders becoming more proactive and mitigating some of these risks before they occur. Not all of them can be completely avoided, but technology can provide important insights when it comes to identifying vulnerabilities in various properties.

In a DigIn podcast, Valkyrie Homes, co-founder and CEO of Faura, an insurtech that allows insurers to gain a better understanding of property resilience for their high-risk properties, discusses the importance of technology in the climate space and how AI and analytics are helping carriers identify and manage property risks for their policyholders.

Weather forecasting cuts weaken insurance risk mitigation

Cuts to U.S. federal weather forecasting agencies will create information gaps that cannot be filled only by private companies, industry analysts and executives say.

Expecting private industry, including the insurance industry, to fill in these gaps, is not realistic, according to speakers at the recent summer meeting of NAIC, the association of state insurance regulators. Having a gap in data from the National Oceanic and Atmospheric Agency (NOAA) and the National Weather Service will affect catastrophe modeling and insurance risk management, as well, they said.

How do insurers leverage AI in climate-related claims?

Natural catastrophes caused over $137 billion in global insured losses in 2024, according to Swiss Re estimates, with Hurricanes Helene and Milton, severe convective storms in the United States and destructive floods accounting for most of the losses.

Digital Insurance interviewed Somesh Mukherjee, vice president of solution architecture at ACORD Solutions Group, to learn more about how AI is used throughout the process for weather-related claims.