How did XDI help?
- Understand your mortgage portfolio’s exposure to physical climate risk
- Identify residential properties most at risk for deeper analysis
- Understand your risk against national averages
- Test portfolio resilience under a range of customisable climate and asset assumptions
- Protect customer data using our market-tested encryption process
- Get results quickly via XDI’s web-based, self-service platform
XDI conducted a portfolio analysis of over a million residential mortgages. The analysis incorporated outputs under a range of climate scenarios and asset vulnerability assumptions. This helped the client manage inherent uncertainty in climate modelling.
The analysis was completed without XDI ingesting any sensitive bank or customer information, which greatly reduced implementation times by managing the strictest IT security and privacy requirements.
XDI further assisted by providing a national benchmark, allowing the bank to view the number of high risk properties relative to the total market, and to set an ongoing risk appetite threshold.
The results were made available to the bank via a PDF report summarising the key findings, ready for presentation to Boards and committees, and data spreadsheets (CSV) to allow portfolio risk teams to conduct further credit analysis.
Metrics included in the results were:
- Maximum-to-Date Value at Risk
- Technical Insurance Premium
- Climate Adjusted Value
- Number of high risk properties
- Percent of high risk properties
Each metric provided insights into loan serviceability, collateral impairment, and portfolio hotspots.
Having identified the high-risk properties in its portfolio, the bank wanted to understand these risks in more detail and evaluate the probability of default. It requested XDI to conduct an asset-level deep dive into the high risk properties.
This allowed the bank to understand what hazards were most responsible for driving the risk profile to the asset, and to check the loan’s insurance coverage, LVR and remaining life, to form an overall view of credit risk.
Engage your mortgage customers on climate risk
XDI’s partner company, Climate Valuation provides a range of products and services to home owners and buyers concerned about the risk of climate change. These products can be used by banks seeking to engage their customers on the potential risk and solutions to a home, over the life of a mortgage. They not only assist mortgage customers in understanding climate change, but also support a bank’s journey towards a more resilient business.
Secure, assurable results
Delivered how you need it
By physical climate risk specialists
Asset management: Benchmark fixed income portfolios
Banking: Stress testing and scenario analysis
Asset management: Stewardship of equity and debt portfolios
Asset management: Climate resilience strategies for real asset portfolios
Banking: Reporting and disclosure
Asset finance: Due diligence
Commercial banking: Analyse your commercial property portfolio
Corporate Lending - Analyse your corporate lending portfolio
Retail banking - Analyse your residential mortgage portfolio
Our vision is not just to identify physical climate risks, but to mitigate them.
XDI can help you develop business plans for adaptation, helping you move from risk to resilience.
Talk to us today to find out more.