Mortgage analytics firm RiskSpan has collaborated with Verisk to create a first-of-its-kind solution for measuring and mitigating the risks of climate change to the housing finance industry.
The collaboration unites RiskSpan's Edge Platform for mortgage analytics with Verisk Extreme Event Solutions' proven set of models — relied on by leading insurance, re-insurance, and corporate and government entities — to assess the risk from natural catastrophes and climate to a given location by providing a property-specific hazard risk metric.
"Verisk's ground-up approach to property-specific risk analysis is the perfect complement to our loan-level approach to mortgage credit and prepayment modeling," said Janet Jozwik, managing director heading up RiskSpan's contribution to the new partnership. "We are excited to layer Verisk's unique property risk scoring into our existing credit and portfolio risk framework."
"Our collaboration with RiskSpan will serve to greatly benefit the housing finance industry by adding critical data and analytics from Verisk's catastrophe models during the loan screening process," said Roger Grenier, senior vice president of Verisk's global resilience practice. "This added layer of portfolio management can help banks and financial institutions better understand the potential risk from extreme weather events to a given property."
The risk to the housing finance industry from extreme events is significant, the companies said. According to Verisk, 62 million residential locations are at moderate to extreme risk of flooding alone.
"We are thrilled to bring the powerful climate and hazard-risk analytics of Verisk to our clients," said Bernadette Kogler, CEO of RiskSpan. "This alliance opens the door to a world of property-level data from the insurance industry that can have tremendous value for applications in the mortgage space."
"The collaborative solution will bring together the best extreme event models, data and climate analytics to the mortgage finance industry," added Bill Churney, president, Verisk's Extreme Event Solutions unit. "With financial institutions facing increased pressure to factor climate risk into their decision making, we expect RiskSpan's enhanced tools powered by Verisk to be a welcome addition to their risk management process."
The collaboration offers two complementary products, including loan-level scoring and climate stress testing, with applications for loan screening, portfolio management, and financial disclosures.
RiskSpan offers end-to-end solutions for data management, risk management analytics, and visualization on a highly secure, fast, and fully scalable platform.
Extreme event solutions at Verisk (formerly AIR Worldwide) provides risk-modeling solutions that help individuals, businesses, and society become more resilient to extreme events. Verisk's extreme event solutions team is headquartered in Boston, with additional offices in North America, Europe, and Asia.
