Moody's Analytics Climate Pathways Solution

Limited offer: Climate Pathways Free Trial

For a limited time, we are offering a free trial of our Climate Pathways Web-based application. Register your interest before May 31, 2024 and we will contact you with more information.

A Flexible Approach to Mastering Climate Risk Scenario Analysis

Facilitate Scenario Selection. Assess Financial Impact. Communicate Effectively.

Assessing and managing climate risk needs a forward-looking approach to perform adequate analysis on both assets and liabilities. This explains why scenario analysis is at the forefront of understanding the financial impact of climate risk.

Moody's Analytics Climate Pathways solution offers a forward-looking scenario modeling approach that helps insurers quantify the financial impact of physical and transition risk. Enabling selection of the right scenario approach for the complexity and uniqueness of your business model. Powered by our award-winning Scenario Generator, the solution is built on a unique combination of many years of scenario modeling, climate science, and deep insurance industry expertise. Climate Pathways offers insurers the necessary rigor and flexibility to confidently generate actionable insights and progress their level of climate modeling sophistication to adapt to current and future regulatory requirements and forward-looking financial disclosures.

The Climate Pathways solution offers...

Flexibility

Access all NGFS scenarios, with the option to use other recognized frameworks. Continually updated with the latest science.
Review and modify settings such as scenario source, baseline, and currency.
Review and modify advanced model settings such as inflation model, carbon tax impact, physical damages and more.
Flexible outputs aligned to your unique asset portfolio profile.
Easily integrate with core actuarial and investment systems.

Confidence

Experiment with different scenarios to gain a deeper understanding of the impact of different assumptions and broaden your analysis.
Split out physical and transition risks to determine attribution and material impact.
Visually display the outputs from the scenario analysis and use the accompanying narrative to explain your recommendations clearly to internal and external stakeholders.
Drive faster board decisions through confidence in your scenario selection, outputs, and credible recommendations.

Rigor

Build consistent analysis, enable internal discussion and challenge across different functions. Drive consensus on the best assumptions and scenarios to meet the unique needs of your business.
Facilitate quicker production of robust and reliable asset class returns and liability risk factors to aid decision making.
Understand and validate assumptions with fully transparent scenarios and quarterly documentation detailing the underlying methodology.
Access to Moody’s experts with insurance industry, climate, scenario and calibration expertise.

Using Climate Pathways

Own Risk and Solvency Assessment (ORSA)

Confidently assess and quantify the financial impacts from physical and transition risk, using different assumptions and scenarios relevant to your business. Translate long-term scenarios to short-term stresses. Build credible recommendations to the board.

Strategic Asset Allocation (SAA)

Explore changes to your business’ Capital Market Assumptions. Quantify the financial impacts on asset classes and market risk-factors from physical and transition risk. Present credible recommendations to internal and external stakeholders.

Forward-Looking Financial Disclosures

Analyze your financial exposure to climate risk by navigating the impacts of different climate assumptions and scenarios relevant to your business. Identify the material financial impacts of physical and transition risk and build robust, transparent climate-related financial disclosures to respond to requirements such as those from the TCFD, ISSB and CSRD.

Why Moody's Analytics?

» Moody's unique combination of deep insurance domain expertise, climate knowledge, and decades of scenario modeling and calibration experience.

» Flexibility to vary the climate assumptions and scenarios to see the impact of different choices and build confidence with robust recommendations.

» Ability to convert long-term climate projections into short-term impacts to better understand material impact and avoid missing key risks.

» Plug and Play with existing modeling infrastructure. Produce financial variables and asset class returns ready to feed into current valuations systems.

» Align assumptions with in-house views and build consensus across business functions.

» Use consistent climate assumptions for modeling asset and liabilities to assess the full balance sheet impact of different climate scenarios.

» Exhaustive documentation to help manage internal and external scrutiny.

Awards