Climate change

Climate change is one of the fastest-growing concerns for non-life insurers and their customers today.

According to a report from consultants Capgemini and financial body Efma insured losses from natural catastrophes have increased by 250% in the past three decades, yet just 8% of insurers are preparing adequately for ongoing issues such as devastating storms and wildfires. This is a leading issue among the industry stakeholders Axco consults with across every market. So what do you need to know now, to help customers mitigate against the growing risks associated with climate change?

Climate change

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There’s a sense among insurers that catastrophic weather events are becoming more frequent and intense.

And they’re happening in all corners of the globe: from wildfires in Australia and California, to melting glaciers and landslides in Kyrgyzstan, and farm-destroying heat and drought in Namibia.

All of this means the insurance industry must collectively make a better job of responding to climate change-related issues. Insurers – particularly reinsurers – who we regularly speak to, already recognise the potential problems ahead.

Our experience mirrors the Capgemini and Efma study in which 74% of insurers interviewed expressed concerns around insuring for climate change in some parts of the world. Yet despite these concerns, a minority (40%) cited developing climate change cover as a top priority among all of the issues and opportunities on their ledger.

But scientific evidence suggests that it seems unlikely such catastrophes will calm down in the near future. The 250% rate of increase of insured losses from natural catastrophes witnessed in the past 30 years may increase further. It’s already affecting policies.

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