Climate change is causing more and more insurers to drop out

The survey was conducted in the first two months of this year, based on a survey of more than 4,900 insurance clients in 16 countries. In addition, more than 270 insurers in twenty-seven different markets were surveyed.

Wide area

The damage insured by natural disasters has increased by 250 percent in the last thirty years. “Risks such as wildfires and storms, especially those affected by climate change, increase the risk of insured losses,” said Seth Rachel, Capgemini’s insurance expert.

“In the past, the risk of catastrophe for insurers came mainly from hurricanes in US states such as Florida and Texas,” Rochlin explains. “However, this is no longer the case. Floods in Europe and wildfires in Australia and California show that these hazards are beginning to take on a wider geographical shape.

“A high percentage of the Earth’s surface is at risk of natural disasters,” the researchers said. The study points out that floods in July last year caused severe damage in Germany and other parts of Europe, causing heavy flooding along Australia’s east coast earlier this year.

“European insurers, in particular, already take environmental, social and ethical issues into account when making policies,” says Roslin. “It also applies to the investments they want to select for their portfolio and their risk mitigation measures.”

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Researchers have found that more than 20 percent of global insurers are reluctant to enter into agreements with companies that do not develop a consistent policy. In addition, it is noteworthy that more than 30 percent of insurers strictly restrict or exclude investments in fixed companies.

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It also found that 74 percent of those currently surveyed believe that climate change has made it harder to insure in some areas. Regions such as California have already been abandoned by many insurers due to the frequency and severity of wildfires.

“At the same time, 71 percent of policyholders said that granting discounts on their contracts would encourage them to reduce the exposure of their property or other assets to the potential impact of natural disasters.”

Also read: Billions of investors lose out on global water crisis

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