Managing climate risks in a less insurable world: why choose an independent expert?

In a world where climate change is profoundly transforming our economic environment, the question is no longer whether your organization will be impacted, but when and how !

Floods, droughts, heatwaves: these extreme events are multiplying and making certain assets simply uninsurable. Faced with this reality, choosing your partner to assess and manage your climate risks becomes strategic.

Climate Risk Management: A Methodical Approach

As with any operational risk, climate risk management follows a proven methodology:

1. Precise identification of risks

2. Quantification of their potential impact

3. Development of an appropriate management policy

4. Implementation of concrete reduction strategies

5. Continuous validation and updating of exposures

This rigorous approach requires sharp expertise and, above all, unwavering objectivity.

However, today, many organizations are turning to their insurers to conduct their climate exposure diagnostics. This practice raises a fundamental question: can one be both judge and party?

The Conflict of Interest at the Heart of the Current System

Imagine for a moment:

• Would you accept a certified organic label from the company that makes the product?

• Would you trust a study on the harmfulness of a product financed by its manufacturer?

• Would you follow the recommendations of a financial advisor who only offers products that pay him?

The answer seems obvious. Yet, this is exactly what happens when an insurer evaluates your climate risks, then uses that same information to adjust your premiums, modify your coverages, or decide not to insure you at all.

The Gradual Demutualization of Climate Risks

The fundamental principle of insurance is based on the mutualization of risks. However, we are observing a worrying trend: insurers apply demutualization when it comes to excluding the most exposed properties while maintaining mutualization to increase premiums for all policyholders. Many municipalities can no longer find an insurer or see their tenders go unanswered. Companies and individuals are facing increasing coverage refusals.

This situation is all the more concerning as the Central Reinsurance Fund (CCR) plans to create an "Observatory of Insurability" which, paradoxically, could accelerate the phenomenon of uninsurability by identifying more and more high-risk areas.

Let's remember that the CatNat regime in France relies on a principle of national solidarity: all insured parties contribute to financing through a mandatory surcharge on their contracts, and the State assumes a significant part of the risk through the CCR. The insurer is therefore not alone in bearing the financial burden of natural disasters.

Independence: Guarantee of Objective Analysis

Faced with these challenges, climate exposure and vulnerability diagnostics become essential strategic tools. They not only allow anticipation of potential damages but also enable the adoption of preventive measures tailored to each specific situation.

The crucial question then becomes: whom to entrust with this mission?

• To your insurer, who has a direct economic interest in evaluating your risks?

• Or to an independent expert, whose sole mission is to provide you with an objective analysis and concrete solutions?

Tardigrade AI: Independent Expertise at the Service of Your Resilience

It is to meet this need for independence and expertise that Tardigrade AI developed, in direct collaboration with companies, the first truly actionable climate vulnerability diagnostic.

Our approach is distinguished by:

• Total independence from the insurance sector

• Rigorous scientific methodology

• Concrete recommendations tailored to each identified risk

• Global coverage of climate risks

• Custom adaptation solutions for each organization

Preparing for the Future in a Less Insurable World

In a context where insurability becomes a major issue, anticipating and adapting to climate risks is no longer an option but a strategic necessity. Organizations that can implement effective adaptation strategies, based on independent and rigorous diagnostics, will transform this constraint into a competitive advantage.

CEOs, risk managers, CSR directors: adapting to climate change is now a pillar of your organization’s sustainability. Do not let those with a vested interest in overestimating your risks dictate your adaptation strategy.

Contact Tardigrade AI to discover how our independent expertise can help you build real climate resilience, beyond mere scores and biased assessments.

Frequently Asked Questions

What is an agnostic climate vulnerability diagnostic, and how does it differ from an assessment conducted by an insurer?

An agnostic climate vulnerability diagnostic is a comprehensive analysis of climate risks conducted by an expert with no ties to the insurance sector. Unlike an insurer's assessment, which may be influenced by commercial interests (premium adjustments, coverage modifications), an independent diagnostic like the one offered by Tardigrade AI ensures total objectivity. Our rigorous scientific methodology precisely identifies your vulnerabilities and provides actionable recommendations without conflicts of interest.

How does the phenomenon of climate uninsurability affect businesses, and how can they prepare effectively?

Climate uninsurability—the situation where certain properties become impossible to insure due to their exposure to climate risks—intensifies with the increasing number of extreme events. Businesses face coverage refusals, higher deductibles, or specific exclusions. To prepare effectively, it is essential to:

1.     Conduct an independent vulnerability diagnostic

2.     Implement targeted adaptation measures,

3.     Diversify your risk transfer strategies beyond traditional insurance

4.     Incorporate climate resilience into your long-term strategic planning.

What are the most common climate risks for organizations, and how can they concretely impact operations?

Major climate risks include floods, droughts, heatwaves, storms, and coastal submersions. Their concrete impacts on operations are multiple: damage to infrastructure and equipment, business interruptions, disruptions of supply chains, rising energy costs, difficulties in access for employees and clients, and impacts on health and staff productivity. These risks can also affect your reputation, legal and regulatory obligations, as well as your ability to obtain financing or insurance.

How to assess the return on investment of climate adaptation measures for my organization?

The ROI of climate adaptation measures is calculated by comparing the implementation costs to the expected benefits. These benefits include: reducing direct and indirect losses related to claims, savings on insurance premiums, avoidance of business interruptions, preservation of asset value, and competitive advantages. Tardigrade AI quantifies these elements in its diagnostic, allowing prioritization of investments based on their effectiveness. Our approach projects risks and benefits over several decades, accounting for future climate scenarios for an accurate and scientifically-based ROI calculation.

What is the difference between climate change mitigation and climate adaptation, and why should my business invest in both?

Mitigation aims to reduce greenhouse gas emissions to limit the extent of climate change, while adaptation involves adjusting your operations and infrastructures to cope with inevitable climate impacts. Your business should invest in both approaches because:

·       Mitigation addresses growing regulatory requirements and stakeholder expectations,

·       Adaptation protects your assets and operations against risks that are already present and will intensify,

·       An integrated approach often creates synergies and co-benefits,

·       Both strategies are necessary to ensure the long-term viability of your organization in a climatically unstable world.

How does Tardigrade AI’s scientific methodology differ from other climate risk assessment approaches?

Tardigrade AI's methodology stands out due to four major innovations:

1.     A site-by-site analysis at GPS coordinates rather than generic scores, incorporating local specifics for each asset,

2.     The use of high-resolution spatial and temporal climate models, calibrated on the latest scientific data,

3.     A multidimensional approach that assesses not only exposure to hazards but also the specific sensitivity of your assets and your adaptive capacity,

4.     Actionable recommendations, prioritized and accompanied by detailed cost-benefit analyses. This scientific rigor ensures precise and actionable results, unlike standardized market approaches.

Which economic sectors are most vulnerable to climate risks and why?

The sectors most vulnerable to climate risks include:

1.     Agriculture and agri-food, directly impacted by changes in temperature and precipitation,

2.     Real estate and infrastructure, exposed to extreme events and devaluation related to climate risks,

3.     Tourism, sensitive to changes in climate conditions and ecosystem degradation,

4.     Energy, facing production and distribution challenges during extreme events,

5.     Transport and logistics, vulnerable to infrastructure disruptions. Each sector presents specific vulnerabilities that Tardigrade AI analyzes in detail, providing a thorough understanding of the risks particular to your industry and organization.

How to effectively integrate climate resilience into my company’s overall strategy?

Effectively integrating climate resilience into your business strategy requires a systematic approach in five steps:

1.     Conduct a complete independent diagnostic that quantifies your exposures and opportunities,

2.     Integrate climate risks into your governance by designating clear responsibilities at the management level,

3.     Incorporate climate projections into your long-term investment decisions (location, facility design, acquisitions),

4.     Develop a scalable and flexible adaptation plan that adjusts to new scientific data,

5.     Communicate proactively about your approach to investors, clients, and employees.

This approach transforms climate constraints into a differentiating strategic advantage and sustains your business model in a context of increasing climate uncertainty.