This is complicated by the extent that models rely on historical data to assess the risk of 2/8  BIS central bankers' speeches  catastrophe. With climate change, the past is unlikely to be a good guide to the future. The dynamics of climate change also present a major challenge to modelling future impacts14.
Distress of insurers could in turn affect the financial system as a whole. This could occur through the interconnections with other parts of the financial system – like banks for example. Or it could occur through the impact of behaviour on asset prices.