My takeaways from First Street's webinar last Thursday - "Climate, the Sixth "C" of Credit": The frequency & intensity of climate events are surging - but insurance markets don't/can't reflect that true risk As a consequence - insurance won't mitigate climate risk for lenders going forward in the same way it has in the past There is a clear relationship between climate events and negative financial outcomes These negative outcomes (e.g. property foreclosures) are most pronounced in flood-prone, underinsured, high-value regions To make matters worse- rising insurance costs are also driving higher levels of foreclosures Given the above factors, climate risk has a material impact on property value and loan performance -> so can be considered a sixth "C" of credit (alongside character, capacity, capital, condition and collateral) What do you think?
Risk and Regulation Expert
3dThe inability of leaders to recognize climate events as Correlation Debacles, regardless of locational diversification, is stunning.