Climate change continues to amplify the frequency and severity of natural disasters around the world, and last years’ global losses were estimated at more than $350 billion (£261 billion). The “natural catastrophe insurance protection gap” is impeding long-term development whilst exacerbating poverty and inequality as households, businesses, and governments are having to absorb the bulk of the financial blow. As such, the need to close the growing insurance protection gap for natural catastrophes (NatCats), especially in emerging markets and developing economies (EMDEs), is becoming more urgent day by day.
Cyclones alone have caused nearly one million deaths globally in the past 50 years – and that’s just one of many climate-driven hazards. Yet despite advances in catastrophe modelling, vulnerable regions still face an alarming protection gap. In many emerging economies, fewer than 15% of disaster-related economic losses are insured, compared to over 50% in advanced markets. This leaves a huge number of communities without access to the financial tools needed to recover after life-changing disasters.
With funding from Innovate UK, Maximum Information is developing an innovative digital platform to help bridge this gap. Their Hazard Impact Tracker is the first catastrophe risk analytics system to integrate weather, climate, and catastrophe modelling data into one cohesive platform.
“Contemporary catastrophe modelling emerged in response to disasters of the late 1980s and early 1990s,” explains the team at Maximum Information. “Those models were designed to protect insurers – but today the challenge is ensuring they also serve communities most exposed to climate risks.”
Drawing on experience across Latin America and Africa – particularly in designing index insurance for smallholder farmers – the team identified a critical need for greater collaboration between insurers, humanitarian agencies, and governments. The Hazard Impact Tracker addresses this by bringing stakeholders together to design more effective disaster risk management solutions.
Maximum Information is working with leading experts at the University of Reading, the London School of Economics, and Aon UK to jointly develop and launch an operational risk transfer product by early 2026. To support this goal, they are engaging with stakeholders to identify priority regions for initial pilots – focusing on cyclone-prone emerging economies where the need is greatest.
To hear more from the Maximum Information team, please watch our panel discussion on Small Steps for Big ESG Impact from the UK National Showcase: Next Generation Professional and Financial Services via YouTube.
Filmed in late summer of 2024. All data and events mentioned are accurate as of that time.