Impact Scenario Modelling and Stress Testing of the Insurance and Banking Sector to Climate Hazards
A Climate-Resilient Marine Spatial Plan will guide the protection and sustainable use of the Virgin Islands’ marine environment. It will define key zones for conservation, fisheries, recreation, and development—supporting climate resilience while enabling a balanced blue economy.
Introduction
Lack of assessed data to understand the level of exposure and vulnerability of the Territory’s insured and mortgaged building stock to climate change hazards is one of the barriers to developing policies to ensure appropriate policy responses in the insurance and banking sector with the objective of keeping housing and insurance affordable and accessible.
A better understanding of the vulnerability and risk profile of the Territory’s building stock would lend to a better understanding of potential shocks to the insurance and banking sectors following climatic events of differing magnitudes, and proactive measures that can be taken to minimise these shocks.
The Impact
This project will engage experts to conduct scenario modeling to determine the likely impact of different intensity rainfall and wind hazard events to The Virgin Islands’ insured and mortgaged asset pool based on a structural assessment of the building stock, building regulations, impact from previous hazard events and climate change projections. Experts will also conduct stress testing of the insurance and banking sector in respect of the assessed scenarios.
Key project outputs include a Climate Resiliency Scorecard for the building stock and Resiliency Assessment of the insurance and banking sector. The project ultimately aims to deliver recommendations for improved adaptation polices in the insurance and banking sector and guidance on keeping home construction and insurance costs contained.
The Problem
Major damage to property from Hurricane Irma
The Solution
Financial model for new insurance plans
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