Insurance News: The heat is on—from climate change to claims
The insurance industry faces numerous challenges related to climate change, social unrest, and other risks. Here’s a breakdown of some key points from the Insurance News Analysis:
1. Extreme Land Surface Temperatures: New satellite data provides valuable insights into extreme land surface temperatures in cities. This data has the potential to aid insurers in underwriting and risk assessment, particularly in assessing heat-related risks. It can also support public-private partnerships aimed at preventing heat-related illnesses and deaths. Additionally, it can be used to mitigate fire risks in property underwriting.
2. Climate Change and Insurance: The insurance industry is grappling with how to address climate change. Some carriers have embraced sustainability initiatives, while others have withdrawn from commitments like the Net-Zero Insurance Alliance. This reflects the ongoing debate within the industry about how best to respond to environmental challenges. Meanwhile, the Association of British Insurers is urging members to strengthen their commitments to biodiversity, indicating a growing emphasis on environmental considerations.
3. Social Unrest and Property Damage: Social unrest can lead to property damage and business interruptions. Predicting such events is challenging, as they can escalate quickly and unexpectedly. Recent protests in France resulted in significant property damage, and carriers are facing claims estimated to be between 650 million and one billion euros. This underscores the need for insurers to assess and manage social unrest risks more effectively.
In summary, the insurance industry is navigating a complex landscape of risks associated with climate change, social unrest, and extreme weather events. New data sources, such as satellite data on land surface temperatures, offer opportunities for insurers to understand better and mitigate these risks. However, challenges remain in determining the most effective strategies for addressing climate-related challenges and unpredictable events like social unrest.