Case Study: AXA strengthens PRA climate stress test reporting with Fathom's event footprints

Insurance stress tests for the Bank of England’s PRA

AXA, a major general insurer, faced the challenge of meeting new regulatory requirements from the UK's Prudential Regulatory Authority (PRA). The PRA required insurers to stress test their financial resilience against specific climate risk scenarios, including a major UK storm surge and an extensive inland flood. AXA needed to select a vendor from a pre-approved list to provide the event footprints for these tests.

AXA chose to use event footprints from Fathom, a vendor they were already working with to build a new European catastrophe model. Fathom provided the required storm surge and inland flood footprints, extracted from their Fathom-UK CAT model, and supplied the underlying raw water depth data for full transparency. This solution enabled AXA to comprehensively explain their loss outputs to the PRA, strengthening their regulatory submission with scientific rigor. The PRA's results confirmed the UK insurance sector's resilience to the tested scenarios.

AXA

Remi Meynadier

Climate Analytics and Research Leader