Moody's wins climate risk modelling solution of the year for providing insurers with a long-term perspective on the challenge of climate risk.

By incorporating climate change risk with a longer-time horizon perspective, the solution enables insurers to differentiate their book of business. It therefore helps bolster their strategies for underwriting, risk mitigation, portfolio growth planning, and reinsurance and capital management.

Moody's also wins the award for the way it has taken its existing models and developed six climate conditioned models, which use the latest climate change science, together with climate change carbon projections.

From North Atlantic hurricane to Europe windstorm, these climate-conditioned models provide a view of risk that can be set for different representative concentration pathways from the Intergovernmental Panel on Climate Change to reflect varying carbon projections, and adjusted for timescales as far out as 2100.

Moody's adds it has significantly improved its climate risk capabilities in the last year with the launch of its Scenario Generator Climate Pathways web-based application.

InsuranceERM's judges were impressed that Moody's climate risk modelling enables insurers to extend the evaluation of portfolio risk and understand 10-to-20-year scenarios for climate change-related physical risks.

"It's becoming clear that the traditional 12-month perspective on current risk is insufficient for portfolio management in the era of climate change," Joss Matthewman, senior director for product management and global climate at Moody's RMS, tells InsuranceERM.

Matthewman adds: "Across both sides of the balance sheet, we encourage the industry to broaden its scenario sets, horizons, and analysis. Looking across scenarios reveals uncertainties and a broader range of macro-economic impacts. This will allow firms to improve the interpretations and recommendations they produce."