Carlyle Rethinks Risk to Give Insurance a Bigger Role (1)

Carlyle Group Inc. is unveiling a new framework for portfolio risk so that asset values reflect the insurance implications associated with severe weather shocks.

The $475 billion Washington-based firm says the current standard — whereby money managers are reactive rather than proactive — needs to be overhauled.

“We want to flip the paradigm and de-risk it so that insurance continues to be available” to assets that are in the crosshairs, Steve Hatfield, co-head of global sustainability at Carlyle, said in an interview. But so far, there’s been “no consistent mechanism that allows insurers to recognize how asset hardening reduces risk.” ...