Pricing Climate Risk
Victor Angel@vanmosti
+0.2%
since Oct 9
The idea
I believe climate change is making disasters costlier, and that money flows to those who measure and price that risk, not just those who insure it. So this basket leans heavily into catastrophe-model and data owners, satellite operators, and sensor makers, with only a small, deliberate slice in insurers themselves as a bet that pricing eventually turns back up after a soft cycle. No single name dominates, and I'm keeping some cash on the side.
What it owns
- Insurers pay annually for catastrophe models and climate risk data to price disaster coverage, creating recurring revenue independent of whether insurance prices rise or fall. · Verisk AnalyticsIt owns the AIR catastrophe models that insurers license annually to price hurricane, wildfire and flood risk, making it the most direct way to own climate-driven demand for prediction tools., Moody's CorporationIt owns RMS, the other dominant catastrophe modeling platform that insurers and reinsurers rely on to quantify disaster risk and set prices., Guidewire SoftwareIt operates the core software that property insurers use to write policies and process claims, and it integrates hazard and climate data into that underwriting workflow., Intercontinental ExchangeIt sells climate and property risk data that lenders and insurers use to assess flood and fire exposure on individual homes and portfolios., S&P GlobalIt sells physical climate risk data and analytics that score how exposed companies and assets are to floods, heat and storms across their real estate and operations., MSCI Inc.It sells climate risk analytics that help large investors estimate what physical disasters could do to their portfolios, profiting as climate risk pricing becomes more rigorous.36%
- Daily imagery and measurements from orbit provide the raw data that weather models and rapid disaster assessments depend on, capturing physical conditions before and after events. · Planet LabsIt photographs nearly the entire Earth every day, providing the raw sensing data that insurers and governments need to understand and respond to climate events., Spire GlobalIt collects weather data from its own satellites and sells it to forecasters and governments, positioning it to benefit if private companies take on more weather work., BlackSky TechnologyIt can photograph the same location multiple times daily, which allows insurers and agencies to assess flood or fire damage within hours of an event., SatellogicIt manufactures low-cost imaging satellites aimed at making earth observation data widely available for risk monitoring and asset assessment.20%
- Instruments deployed on satellites, in oceans and on land measure storms, floods and water conditions, forming the sensing layer that detects what climate events actually affect. · Teledyne TechnologiesIt manufactures imaging sensors and ocean instruments including underwater gliders and buoys that measure the conditions and impacts behind storms and sea-level rise., L3Harris TechnologiesIt builds instruments deployed on government weather satellites that power the forecasts underlying disaster prediction and climate modeling., XylemIt sells water sensors and flood monitoring systems that cities and utilities deploy to manage infrastructure as heavier storms intensify flooding., TrimbleIt makes precise positioning and mapping tools that measure land, buildings and terrain, providing the geospatial data layer that identifies what assets face disaster exposure.19%
- Disaster insurance and reinsurance prices are currently soft, so these positions are held small as a deliberate wager that a major loss year will push prices back up. · AonIt operates as a reinsurance broker and catastrophe bond arranger, earning fees as climate risk flows into those markets, and it runs its own catastrophe models., RenaissanceRe HoldingsIt is a catastrophe reinsurer that historically raises prices when it has opportunity and cuts when prices are weak, positioning it to profit if a major loss year reverses current soft pricing., Arch Capital GroupIt is a reinsurer known for disciplined underwriting, reducing writings in soft markets and expanding when prices recover, positioning it to benefit from a return to higher catastrophe losses.12%
- Cash13%