Data collection and sharing are crucial for understanding and addressing NatCat protection gaps. Supervisors are uniquely positioned to facilitate collection of relevant data on NatCatRisks.  Access to timely, accurate, and granular data is essential for evaluating risks and designing effective insurance products. However, data challenges persist, especially in emerging markets and developing economies (EMDEs), where historical and forward-looking data is often incomplete or unavailable.

Initiatives like EIOPA’s NatCat protection gap dashboard demonstrate the value of centralised efforts in aggregating and analysing data. Yet, legal and commercial barriers frequently constrain data sharing, underscoring the need for innovative approaches to foster collaboration among stakeholders.

Improving the quality of risk data can also reduce insurance costs. When insurers have access to more precise data, they can lower the uncertainty loadings built into pricing, making insurance more affordable. However, addressing data gaps requires significant investment in infrastructure, such as meteorological stations, and the development of mechanisms for recording and sharing disaster-related losses.

The IAIS’s Global Insurance Market Report on the financial stability implications of NatCat protection gaps also highlighted that the diversity of NatCat events and the lack of globally consistent data make it difficult to fully understand the transmission channels through which these gaps affect financial systems. Such analysis often relies on historical events and may not fully capture the future risks posed by climate change. This underscores the importance of forward-looking analyses and the development of models that account for changing risk patterns.