It can become increasingly impossible to recover from the damage caused by anthropogenic climate change. Insurers have sought out what the effects of climate change meant for their business and there is a consensus that taking into account the impact of extreme weather events that are already spreading will drive up premiums, even if the goods, the health and the life depend on it. the zones become uninsurable. According to The Economist, a major reinsurer, Munich Re, has estimated $ 160 billion in losses from global natural disasters in 2018 – half of which is uninsured. In 2017, thanks to the three major hurricanes hitting the US coast and Caribbean islands, estimated losses amounted to $ 350 billion, of which less than half were insured. However, it is only a fraction of what could be reserved – a 2013 study published in Nature revealed that average annual flood losses in 136 of the world's largest coastal cities could from $ 6 billion in 2005 to more than $ 1 trillion in 2050 – thanks to extreme weather events and rising sea levels – unless cities invest about $ 50 billion a year in adaptation to climate change.
Add to the floods the threat of landslides, hurricanes, drought and poor harvests, and insurers are considering a very dark future. Vulnerable areas, such as coastal cities and forest-lined cities (not to mention the forest fires in California and Greece in 2018) could lead to soaring costs of insurance. 39, a property. In 2016, ClimateWise, a coalition of 29 of the world's largest insurers on climate risk assessment, warned that the "gap of protection" – the difference between the cost of natural disasters and the amount insured – had quadrupled since the 1980s. The Bank of England had warned, at the time, that climate change could pose a serious threat to "economic resilience and financial stability". ClimateWise concluded that the insurance industry should use more of its $ 30 trillion in investment to strengthen the resilience of society to the effects of climate change – a difficult path for insurers given the investments made in climate change. many fossil fuels – and must be based on risk management convince private and public sector stakeholders of the urgent need to act to combat climate change.
The challenges posed to climate change by the insurance industry will strike those seeking coverage. The 2015 fire in Fort McMurray in Canada hit the insurer Aviva Plc, who for decades had estimated that the fire risk in the area was marginal to nonexistent. Now that Aviva has determined that the forest fire is an example of the impact of global warming on the likelihood of a natural disaster, it has increased premiums in Canada. But since short-term forecasts are imprecise and the deliberate attempt to question the anthropogenic nature of climate change, coverage against extreme weather events / disasters is incredibly difficult to conceive. A country like India, where rainfed agriculture is the backbone of millions of families, insurance penetration is poor at first and facing an unprecedented threat from climate change, a robust hedging strategy should be developed risk. Otherwise, adaptation to climate change could be a major challenge.