Combined, global costs resulting from catastrophic storm damage may show an increase of two-thirds by the 2080s, according to the Association of British Insurers (ABI).The new report, “Financial Risks of Climate Change,” provides a global analysis of the projected climate-change trends of hurricanes, typhoons and windstorms. The potential effects of such changes may increase insured and uninsured annual losses to $27 billion by the 2080s.According to ABI, it will only take small increases in hurricane, typhoon and windstorm intensity to heighten the severity of damage costs incurred. Reasonably, extreme storms will likely cause extensive destruction. As the cost of capital required to cover damages increases the volatility of the worldwide insurance market will also increase. Behind the increase are high-emissions, which indicates a twofold increase in carbon dioxide levels, that result in weather changes that could boost insurers’ capital requirements for U.S. hurricanes by more than 90% and for Japanese typhoons by more than 80%.ABI says the economic impact of climate change can be decreased if governments implement initiatives to reduce carbon emissions, improve flood defenses and strengthen building codes.
Will reinsurance capacity be stable in Canada after record-breaking NatCat losses?
Though 2024’s reinsurance renewal season started off stable compared to 2023, this summer’s record-breaking insured losses from four major Nat Cats will undoubtedly see growth in Canadian carriers’ reinsurance demand. But reinsurance supply may not grow commensurately, experts tell Canadian Underwriter. Beyond Canada, global insured Cat losses could be the factor that makes or breaks […]
By Alyssa DiSabatino | September 23, 2024
2 min read