Over the last five years, billion-dollar weather and climate disasters averaged $149.3 billion in annual US losses. That is more than double the 45-year historical average, according to NOAA’s National Centers for Environmental Information (NCEI).
Weather risk assessment has shifted from an internal resilience exercise to a capital question. Institutional investors ranked climate adaptation third among investment priorities in 2025, up from sixth in 2024, according to Morgan Stanley’s Sustainable Signals survey. The survey covered more than 950 asset owners and managers across North America, Europe, and Asia-Pacific.
Investors, asset managers, and senior executives now require evidence that weather and climate exposure was evaluated before capital is committed.
Alexander Mirescu (pictured), head of extreme weather at Zurich Resilience Solutions, has tracked this shift firsthand.
“What’s changed is who’s asking,” he said. “Five years ago, many organizations still had to make the case for spending on resilience. Now investors, asset managers and risk managers want to know whether climate and weather risk was evaluated before the money was committed.”
Most organizations have mapped their hazards. The harder task is converting that map into a financial number.
“The biggest gap is still the data,” Mirescu said. “Most companies can tell you which hazards they face. They know a plant sits in a floodplain, or that a region gets hail, wildfire or extreme heat. What they often can’t tell you is what that means in dollars.”
Translating a hazard into a dollar figure requires data tied to financial outcomes. That includes projected damage costs from extreme weather events, operational downtime costs, and how an asset performs under future climate scenarios.
“How much damage could a flood do to that building? How long would operations be down, and what would that cost? What does it mean for an investment you plan to hold for 20 years? Answering those questions takes data you can trust, tied to financial outcomes,” he said.
Organizations furthest along in this process go beyond the current risk picture. Mirescu noted that the most advanced companies also model how their weather risk is likely to shift in the years ahead.
Mirescu argues that a thorough weather risk assessment works at two levels. One looks across a portfolio to find where risk is concentrated. The other examines how specific hazards could affect a particular site. Both are necessary.
“Either way, the hazard is only the starting point,” Mirescu said. “A flood map or hail model tells you what could happen at a location. It doesn’t tell you how vulnerable the building is, what protections are already in place, or what happens to operations if something fails.
"That’s why site visits still matter. They show you what’s working, where the weak points are, and which fixes would actually reduce the risk.”
The goal of an assessment is not to accumulate data. It is to arrive at a clear answer about what to do next, and with enough time to act, according to Mirescu.
“Our risk engineers don’t judge an assessment by how much data it produces but rather what to do next and in time to act before something goes wrong,” he said.
That sharper understanding of exposure also changes the renewal conversation. Mirescu draws a distinction, though, between a stronger position at renewal and what the work is for.
“I wouldn’t think of this mainly as a way to lower premiums, though,” he said. “The bigger payoff is knowing your risk better, which helps with operating decisions, investment decisions and where to spend on resilience.”
A detailed assessment of company-owned facilities does not capture weather exposure from the supply chain.
“You’re only as resilient as the companies you depend on,” Mirescu said. “You can have a serious disruption without any damage to your own buildings. A supplier floods, a highway or rail line goes down, a logistics provider can’t move freight, and suddenly your operation is affected.”
Extreme weather ranked second in 2026 among threats to global supply chains, behind geopolitical fragmentation, according to Everstream Analytics’ annual risk report. Flood disasters now average $42 billion annually, 27% higher than in 2000, the report found.
Mirescu argues that risk managers need to map supply chain dependencies with the same discipline they apply to their own facilities. That means identifying which suppliers are critical and where they operate. It also means asking whether those suppliers have assessed their own weather risk and whether they have business continuity plans.
“More companies are building those questions into supplier due diligence, because a supplier’s problem becomes your problem very quickly,” he said.
Many organizations invest in identifying their weather risk and then do not act on what they find. Mirescu identifies two structural mistakes that explain why.
“The most common mistake is treating extreme weather as its own separate project,” he said. “It belongs inside enterprise risk management and in how you evaluate facilities, investments and suppliers.”
From there, Mirescu outlines a practical starting framework.
“Start by getting a clear picture of your exposure. Use physical risk analytics to see where your vulnerabilities are concentrated. Do site assessments at the locations that matter most. Map your supply chain dependencies. Then ask a simple question: if this happened tomorrow, where would it hurt most?”
The second mistake is treating the assessment as a destination.
“The other big mistake is stopping once the assessment is done,” Mirescu added. “Many organizations spend a lot of time identifying risks and then don’t do much with what they find. A heat map doesn’t protect anything. The value comes from using what you learned to plan improvements, change how you operate and build resilience over time.”
