AD&Co Releases LoanKinetics-Climate Impact Suite

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Oct 04, 2023, 15:46 ET

NEW YORK, Oct. 4, 2023 /PRNewswire/ -- Andrew Davidson & Co., Inc. (AD&Co), a leading provider of mortgage analytics to depositories, insurance companies, buy-side investors, originators, and servicers, announces the release of the alpha version of Climate Impact Suite within their LoanKinetics application for the analysis of whole loans.

Regulators and investors are both looking for solutions to help quantify the financial impacts of increasing climate risk. Addressing the needs of the mortgage sector—with roughly $12 trillion in mortgages outstanding—is essential to success in this endeavor. LoanKinetics-Climate Impact Suite (LK-CIS) is a truly granular solution that quantifies the impact of future increases in borrower insurance costs due to rising hazard insurance rates on individual mortgage loans and house prices. The first version will be most useful to originators, whole loan holders, servicers, and mortgage insurers who have property-level information.

LoanKinetics uses loan-level information on borrowers, properties, and loan characteristics to provide cutting-edge scenario analysis and simulation capabilities to help users value and analyze the risk of whole loans. AD&Co's Climate Impact Suite extends the capabilities of LoanKinetics, using property-level information from leading climate analytics providers to measure the potential impact of higher insurance premiums (such as those for hazards covered by homeowners, flood, and wildfire insurance) on the future behavior of borrowers and home prices.

"We look forward to additional client feedback as we develop and expand the capabilities of LoanKinetics that enable mortgage market participants to better measure and manage climate-related risks." -- Eknath Belbase, Director

In order to extend these capabilities to the analysis of mortgage-backed securities and structured products such as agency credit risk transfer and reinsurance transactions, AD&Co will also integrate the climate-conditioned models implemented in LK-CIS into its other applications and libraries.

"With the growing focus on the impact of climate risk on the availability of homeowners insurance, we are happy to offer a solution based on in-depth research and detailed property data that quantifies the potential impact of climate on mortgage prepayment and default due to changes in insurance cost and availability." -- Andrew Davidson, President

About Andrew Davidson & Co., Inc.

Andrew Davidson & Co., Inc. is known for its leadership in the development of financial research and analytics, mortgage-backed securities product development, valuation and hedging, housing policy and GSE reform, and credit risk transfer transactions. AD&Co develops and licenses prepayment and credit models, as well as risk measurement tools that are used as benchmark analytics by a roster of the world's largest and most successful financial institutions including top mortgage and commercial banks, insurance companies, mortgage insurers, reinsurers, credit unions, broker-dealers and investment management firms.

For more products and services information, visit www.ad-co.com and for direct inquiries contact [email protected].

SOURCE Andrew Davidson & Co., Inc. (AD&Co)