Wildfires, floods and hurricanes: Climate chaos’ unexpected impact on MBS

Physical climate risks are significantly impacting issuers, investors and borrowers across the US; GSEs are holding an estimated $6trn in debt that does not price flood risk*, and large home insurers are withdrawing from key states exposed to wildfires and hurricanes to limit losses**, leading to a rise of 21% in home insurance costs to US home-owners since 2015, difficulty in obtaining mortgages and widespread reliance on insurers of last resort. Measuring and understanding your holdings’ risks to these hazards is therefore of key importance, and we are pleased to announce our launch of our Physical Climate Risks in MBS solution to help. The webinar will discuss: • The importance and impact of considering physical climate risks in property risk assessments • Global climate models – what are they, and how to use exposures in a financial context • Our recent research showing the significant impact of inland flooding on prepayment speeds and valuation in CMBS. Hosted by Katie Prideaux, Director, Sustainable Investment Analytics, joined by our guest speakers: • Josh Gilbert, CEO at Sust Global • Malea Figgins, Research Analyst at TCW Group • Loy Weng, Senior Quantitative CMBS Researcher at Yield Book Analytics, An LSEG Business * Mortgage Finance and Climate Change: Securitization Dynamics in the Aftermath of Natural Disasters (nber.org) ** Insurers withdraw from riskiest areas as threats from climate change grow: NPR