Climate Risk Is Becoming Data Work

Climate risk is turning into a data and pricing problem for insurers, not just a sustainability report topic. In April, California lawmakers, insurance executives and climate-data vendors all pushed that shift further into day-to-day decisions. (insideclimatenews.org) On April 22, Inside Climate News reported that California’s SB 982 would let the state attorney general sue large fossil-fuel companies to recover climate-attributable disaster costs tied to the California FAIR Plan, state borrowing and policyholder losses. The bill was introduced by state Sen. Scott Wiener on February 4 and amended on April 6. (insideclimatenews.org) (legiscan.com) The bill says companies meeting the definition of “responsible parties” could be held strictly liable, and any recovery would go into an Attorney General Climate Disaster Fund. LegiScan shows SB 982 failed passage in committee on April 14 by a 6-2 vote, with reconsideration granted. (legiscan.com) California’s insurance backstop is already under strain. The California FAIR Plan says rising climate-driven wildfire risk and reduced private-market availability have pushed more homeowners into the plan, and Insurance Business reported in October that the FAIR Plan sought an average 35.8% home-rate increase. (cfpnet.com) (insurancebusinessmag.com) At the same time, insurers are treating climate risk as part of core risk operations. EY and the Institute of International Finance said this week that their third annual survey covered 106 insurers across the Americas, Europe, the Middle East, India and Africa, and Asia-Pacific between November 2025 and January 2026. (ey.com) (iif.com) That survey found cyber, third-party risk, operational resilience and artificial intelligence at the top of near-term agendas, while data privacy and data ethics, climate transition risk and a potential global debt crisis led longer-term concerns. EY said chief risk officers now want more real-time risk insight, stronger governance and more digitally skilled teams. (insurancebusinessmag.com) (ey.com) Physical climate risk means the direct damage from heat, flood, wildfire or storm at a specific place. For an insurer, that turns into a basic pricing question: what could happen to this building, in this ZIP code, over this policy term. (garp.org) That is why vendor choice has become its own risk-management task. GARP said in October 2025 that its benchmarking study of 13 physical-risk data vendors found “strikingly different” results, with differences driven by modeling choices, hazard assumptions and even how vendors place an asset when location data is incomplete. (garp.org) Callendar, a climate-risk software company, made the same point in a March 5 guide comparing public climate datasets such as the Intergovernmental Panel on Climate Change Atlas, DRIAS, Copernicus Climate Data Store and the Earth System Grid Federation. It said firms now have to test data sources for transparency, limits and fit with adaptation or regulatory use cases, not just buy the most polished dashboard. (callendar.tech) California regulators have been moving in that direction for years. The California Department of Insurance says it has already run climate scenario analysis on insurers’ investment portfolios, separating transition risk from physical risk as part of supervisory work. (interactive.web.insurance.ca.gov) The result is a market where climate arguments, legal liability and underwriting systems are colliding. Whether SB 982 advances or not, insurers are already being pushed to defend the data behind every rate, every exposure map and every decision to stay in a market or leave it. (insideclimatenews.org) (ey.com)