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Severe weather events such as hurricanes, floods, hailstorms and wildfires are increasing in frequency and intensity on a global scale. Earlier this year, experts predicted an overactive hurricane season, urging communities to prepare for potential loss and insurers across lines to take a more proactive approach to catastrophic weather impacts through data-driven insights and technology. In the face of climate change, some carriers are adopting tools like IoT tech, satellite aerial imagery and parametric insurance.

Risk Management Partners, a unit of Munich Re, recently announced a partnership with IT consulting firm CGI to help insurers reduce claims and increase profitability. Munich Re will combine its Intelligence Platform with CGI’s climate risk mitigation offerings to provide insurers with a platform that enables data-driven decision-making.

“We are delighted to join forces with CGI in helping insurers address increasing climate risks,” said Christof Reinert, head of Risk Management Partners at Munich Re, in a press release. “Climate change and the need to drive forward sustainability actions will continue to grow in importance, and insurers are looking for proven expertise and innovative solutions to respond to these trends. Our combined offering will deliver the comprehensive climate risk mitigation capabilities insurers need.”

Impacts from extreme events are seen across insurance lines. According to the recently released Q2 findings of CCC Intelligent Solutions’ 2024 Crash Course report, more frequent and severe storms are resulting in a surge of higher auto insurance claims costs and longer repair times. The average total cost of repair increased over 3% in the first quarter of this year compared to early 2023, of which the report attributes labor rates and parts costs. Electric vehicles (EVs) made up 2.4% of all repairable claims earlier this year, which is an increase of 1.6% from last year, and the average EV repair cost is nearly 47% higher than non-EVs.

“Extreme weather events are increasing in severity, becoming major disruptors in the auto claims and repair industry,” said Kyle Krumlauf, director of industry analytics at CCC and co-author of Crash Course, in a press release statement. “Our Q2 report delivers critical insights, showing that the frequency and severity of storms are not just a seasonal issue but a persistent challenge that demands strategic planning and swift adaptation from industry players.”

The report is based on insights from CCC’s aggregated historical claims data, which include 300 million claims-related transactions. The Crash Course also highlights the impacts of hail-related auto claims, which are about 22% more expensive to repair than the average comprehensive claim and almost 26% costlier than the average repairable claim. Hail-related claims increased nearly 12% of all comprehensive claims in 2023, and average repair costs for vehicles damaged by hail increased 15% in the past three years.

 The report encourages improved preparation efforts through robust strategies and technologies, including leveraging AI-powered tools with historical data and predictive analytic capabilities to improve storm severity forecasting. CCC also suggests that automated claims processing can help to improve assessment speed and customer satisfaction.