There is no doubt the insurance industry’s biggest current data challenge is around sourcing information to help manage climate risk and environmental, social and governance (ESG) risk, in both underwriting and investments.

Moody’s demonstrated the InsuranceERM judging panel it was worthy of victory in the data solution category because of its comprehensive climate and ESG solution, with good testimonials from clients.

The firm’s capabilities extend from ESG scoring of small and medium-sized companies based on predictive analytics, through to deep-dive assessments of climate and ESG exposures, to monitoring of portfolios to ensure future resilience. These resources can be applied to companies, properties, sovereign states, regions and postal codes.

Through its acquisition of leading catastrophe modelling firm RMS last year, Moody’s has been able to provide insight into location-level catastrophe risk to drive better decision-making and avoid adverse selection.

The firm described how it has helped insurers incorporate ESG risks into their underwriting; asset selection, screening and monitoring; and also into “know your supplier” processes.

Transparency is a key feature of the offering and Moody’s provides the raw data underlying its assessments so clients can take their own view of risk.

“ESG and climate have become focal points for insurers as they continually assess new and changing risks. Stress testing is an essential part of that assessment as it allows insurers to understand the sensitivity of their liabilities to different risk factors – an area where demand is growing constantly,” a Moody’s spokesperson says.

“Our science-driven and forward-looking climate risk data, scenario modelling, and reporting solutions help insurers keep pace with market and regulatory developments.”