Insurance industry estimates growing costs due to climate change

Friday, 03 July 2009 12:44

Climate change already impacts the insurance industry and costs are expected to grow further over the coming decades, the International Association for the Study of Insurance Economics say in a report released Thursday.

According to the report, which was drafted by senior insurance executives and international climate change experts, “unmitigated climate change may have significant adverse effects on the long-term development of the world economy, ranging from water shortages for food production to an increased severity of tropical windstorms. Developing countries are particularly vulnerable, facing the risk of social disorder and miss migration”.

The main factor for the rising costs is, however, “largely due to socio-economic factors such as value concentrations in coastal areas. This trend could accelerate as a result of climate change, primarily through changing weather patterns. It also depends on the willingness and success of insurance companies in providing coverage for their clients”, the report states.

The report also says the insurance industry is keen to establish a stronger climate partnership with governments

Against the backdrop of the research report, over 50 CEO members of the International Association for the Study of Insurance Economics, also known as the Geneva Association issued an unprecedented industry statement which outlines their assessment of climate change and its implications. The Statement reaffirms the industry’s commitment to support its customers in mitigating and adapting to climate change through enhanced

Read the full report here.