MAPFRE collaborates with Lobelia Earth to explore the impact of climate change

MAPFRE, the largest Spanish insurance company in the world and leader in Spain and Latin America, has partnered with Lobelia Earth, leader in climate data, to explore the ability to predict the impact of climate change on physical risks in MAPFRE’s insured portfolio. The project has been carried out between the technology startup, MAPFRE RE, the MAPFRE group’s reinsurer, and MAPFRE Open Innovation, the group’s strategic commitment to promoting open innovation.

MAPFRE takes an active role in the necessary and urgent transformation towards a low-carbon economy. The company has an individual objective of extending emissions neutrality, already achieved in Spain and Portugal, to the main MAPFRE countries in the world by 2024, and to achieve global neutrality by 2030. Along these lines, its current sustainability plan includes ambitious commitments such as not insuring or investing in coal, gas or oil companies that do not have an energy transition plan.

With the increase in both the intensity and frequency of extreme weather events, risks associated with climate emergencies are a priority for the insurance industry, which must respond to the growing demand for products adapted to this new paradigm.

A pilot of more than 5,000 global assets

In this context, MAPFRE is at the forefront of integrating climate risks into its assessments, and has been collaborating with Lobelia Earth – a company specialising in climate risk analysis – on a pilot project to estimate the climate risks affecting its assets.

In this pilot, through the Lobelia.Climate platform, fourteen commonly used extreme weather indicators were automatically assessed and quantified for seven climate hazards, such as flooding, extreme wind, extreme temperature, extreme rainfall, forest fires, and drought. This has been done for a representative portfolio sample of 5,000 globally distributed assets. The results are presented in an interactive map for the different climate scenarios.

In contrast to available global climate models, Lobelia’s methodology calculates extreme events on a local scale, optimising the accuracy of predictions through observations and limiting uncertainty through the use of multiple physical models.

“At MAPFRE, we have been looking for some time for new ways to analyze and test predictive models that help us to anticipate the impact of climate change and assess its risks. The Lobelia.Climate platform allows us to estimate different climate variables for various scenarios and time horizons, assessing their possible impact on our portfolio. This capability is an enabler for making better underwriting and climate risk management decisions”, says Juan Satrústegui, Head of Nature Risk at MAPFRE RE.

“Nowadays, climate risk prediction is essential for insurance companies. Lobelia. Climate allows the estimation of physical risks affecting different assets in as many locations as necessary, offering a highly innovative, automated solution. These services are a crucial element in the effort to quantify and minimize financial losses due to extreme events,” says Laia Romero, CEO of Lobelia.