Beyond Traffic-Light Risk Scores: Building Climate Risk Models That Actually Work | Joan Saladich (Part 1)

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Making Risk Flow | The Future of Insurance 26 min 2 speakers 8 chapters transcribed 1 month ago
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What is Joan Saladich’s background and the core mission of Geoskop?

Joan Saladich 0:06
Any deterministic prediction, like a risk score or like saying no, it's gonna be this amount of rain or it's gonna be this temperature in five years, in ten years, is wrong by default. So when you use a traffic light, you're using a qualitative deterministic prediction, so it's wrong by default. Indeed for ESG for reporting it was enough, but for underwriting risk it's not enough. You need complexity. You need to embrace the complexity.
Jake Harding 0:35
Hello and welcome. My name is Jake Harding, and you're listening to Making Risk Flow Exploring the Ecosystem, a new companion series to the Making Risk Flow podcast, where we sit down with data providers, technology leaders, and Saitora partners to uncover actionable knowledge on how insurance can achieve frictionless risk flows. So today we're joined by Joanne Saladik of Geoscope. How are you doing, Joanne? Hello, good afternoon. Doing great. Excited to be here. Thanks for having me. No problem at all. Thank you for joining us. I'm excited to chat to you today as well. So to start us off, could you give us a brief overview of your background and also the core mission of Geoscope? Sure. So I'm Joanne.
Joan Saladich 1:19
From Geoscope, we are a small climate boutique from Barcelona, Spain. The company was founded back in 2020. And we began working for renewable energy, especially in the field of predicting the impacts of climate change in the ACE evaluation. So one of the things that we saw is that renewable energy investors and this kind of utilities, they Lack of enough know-how to understand how a wind farm or a solar park, how the resource will change in the next 20 years. But this has a direct impact on their PL. And indeed, the climate modeling, the climate projection, the climate prediction of wind and solar radiance was something very attractive to them. But one of the things that we saw is that accuracy predicted.
Joan Saladich 2:09
Accuracy is crucial. For you to understand, our client at the very beginning, they were testing us, like they had their own weather data that they got from a wind farm, let's say, and they were sharing like 50% of the data. And they were saying, Can you predict now the other 50%, the next 10 years actually? So we had to do a 10-year prediction, but then they were cross-checking, and we saw nothing about the results. So the the pressure was pretty high, it was pretty intense. And this marked our DNA. So we understood that in the field of the climate prediction, climate risk, you need to be accurate if you want to be useful for businesses. And so this is kind of the origins from GeoScope, the obsession for the accuracy, the predictive accuracy when we predict that variables will
Joan Saladich 2:59
Wind, soil radiance, depth, temperature, precipitation, rainfall, and so on and so forth. During these years we also count with the support of the European Space Agency, the ESA.

Why are traffic‑light and deterministic climate risk scores considered fundamentally flawed for underwriting?

Joan Saladich 3:11
So they have been helping us funding part of our research, which is great because ESA is all about satellites indeed, it's space agency. And we are like the climate. Boy of the Easter, we are the only climate startup. But that's super good at some point because it positions us, it helps us to be positioned as a research company into a point that nowadays, when we are working with one of the largest oil companies in Europe and in the world, and yeah, we have a contract with them, but it's super interesting because it's like, no, no, no, I want you to do research. So we are doing like private climate research for them. So yeah, that's kind of the origin of GeoScope and our vision. But also in these five years, six years already, we also have been checking how the market, how the climate prediction market, how the climate risk market has been evolving.
Joan Saladich 4:09
And at some point we realized that due to maybe Regulatory pressure, due to how the market is pointing to, let's say, disclosing climate risk impacts, a lot of startups came into the game. And here is where we saw that part of the insights that these startups deliver could be improved. And we also develop our own climate change models. So that's another thing that we are doing at Geoscope.

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