ICEYE launches catastrophe data for banks' climate risk

ICEYE has launched natural catastrophe monitoring products for the global banking sector, aimed at climate-driven credit risk.

The offering uses property-level impact data covering floods, wind, earthquakes and wildfires. Banks can integrate the information into credit risk, valuation and stress-testing systems.

Financial institutions are facing closer scrutiny over the effect of extreme weather on loan books and collateral values. Floods and hurricanes can reduce property values and increase financial pressure on borrowers through business disruption and repair costs, raising mortgage delinquencies and defaults.

The service is built around ICEYE's synthetic aperture radar satellite constellation, which it describes as the largest of its kind. The system collects hazard and impact data continuously, including through cloud cover and in darkness, and is designed to provide near real-time measurements such as flood extent and depth at building level, as well as damage assessments from hurricanes, wildfires and earthquakes.

Banking use

Lenders can use the data to identify loans linked to damaged collateral, estimate potential impairment losses and feed those insights into capital allocation and stress tests. The information could also help banks assess how natural catastrophe events may affect investments and support decisions in trading operations.

Another intended use is customer response after a disaster. By locating affected borrowers more quickly, banks may be able to target relief measures, restructuring or forbearance more precisely.

The products may also support environmental, social and governance reporting and climate-related disclosures by giving firms event-based records of how physical risks are monitored and managed.

Historic records

Alongside live event monitoring, ICEYE is offering access to a catalogue of historical natural catastrophe events. This gives banks a global record of event frequency and impact that can be used to test and refine risk and valuation models against observed outcomes.

The historical dataset is intended to help lenders improve loss estimates, collateral assessments and scenario analysis. It also provides a basis for comparing current events with past disasters across regions and property markets.

The launch reflects a broader shift in banking towards more detailed analysis of physical climate risk. Regulators and investors have pushed financial institutions to show how they measure the potential effect of severe weather on assets, lending portfolios and capital planning.

Observed data has become more important in that process because model-based estimates can struggle when events differ sharply from historical norms. Satellite-derived information has increasingly been used by insurers, governments and infrastructure operators after disasters, and lenders are now seeking similar visibility into the condition of underlying collateral.

Stephen Lathrope, Senior Vice President of solutions at ICEYE, set out the rationale for the launch.

"As climate-driven events become more frequent and severe, banks are facing a growing need to understand how these risks translate into credit exposure at a granular level. By enabling access to consistent, event-based data that delivers an asset-level view of impact, institutions can better quantify potential losses, stress-test their portfolios against real scenarios, and demonstrate a more robust and transparent approach to risk governance," said Lathrope.