2024 Climate and Catastrophe Insight
22 January 2024
Damage from global natural disasters in 2023 totalled $380 billion in economic losses, driven by significant earthquakes and severe convective storm (SCS) activity in the United States and Europe. The year marked the hottest on record. These events highlight the need for better disaster preparedness and planning to reduce risk, protect lives and increase resilience.
Natural Catastrophe and Climate Report: 2023
17 January 2024
In 2023, the estimated total economic costs of direct physical damage and net-loss business interruption from global natural perils was USD357 billion. The private insurance market and public insurance entities covered an estimated USD123 billion of that total. This marks the fourth consecutive year that nominal insured losses have topped USD100 billion, and the sixth year out of the last seven.
Allianz Risk Barometer - Identifying the major business risks for 2024
16 January 2024
Elevated levels of disruption look set to continue in 2023 as dangers from digitalization, the war in Ukraine, high energy prices and inflation, geopolitical and economic uncertainty, and climate change test already strained business models and supply chains, according to the Allianz Risk Barometer.
The Global Risks Report 2024 - 19th Edition
World Economic Forum
10 January 2024
Last year’s Global Risks Report warned of a world that would not easily rebound from continued shocks. As 2024 begins, the 19th edition of the report is set against a backdrop of rapidly accelerating technological change and economic uncertainty, as the world is plagued by a duo of dangerous crises: climate and conflict.
Record thunderstorm losses and deadly earthquakes: the natural disasters of 2023
9 January 2024
Worldwide, natural disasters in 2023 resulted in losses of around US$ 250bn (previous year US$ 250bn), with insured losses of US$ 95bn (previous year US$ 125bn). Overall losses tally with the five-year average, while insured losses were slightly below the average figure of US$ 105bn. Unlike in previous years, there were no mega-disasters in industrialised countries that drove losses up (such as Hurricane Ian in 2022, which caused overall losses of US$ 100bn and insured losses of US$ 60bn).
Provisional State of the Global Climate 2023 - WMO
30 November 2023
The WMO provisional State of the Global Climate report confirms that 2023 is set to be the warmest year on record. Data until the end of October shows that the year was about 1.40 degrees Celsius (with a margin of uncertainty of ±0.12°C )above the pre-industrial 1850-1900 baseline. The difference between 2023 and 2016 and 2020 - which were previously ranked as the warmest years - is such that the final two months are very unlikely to affect the ranking.
AXA Future Risks Report 2023
30 October 2023
“Polycrisis” is the word that sums up best the last three years, in which the global Covid-19 pandemic has been closely followed by the return of war in Europe and renewed tensions in the Middle East, against a backdrop of increasingly extreme weather events as climate change takes hold. In the last year, yet another source of uncertainty has demanded attention: rapid development in artificial intelligence (AI), with the emergence of generative AI and ChatGPT in particular.
In its 10th edition this year, the Future Risks Report 2023 reveals that people around the world feel vulnerable to these and other risks in their daily lives – but share optimistic views on our ability to deal with future crises. The Future Risks Report is the result of our regular questionnaire of experts drawn from AXA and our professional networks, and members of the general population across the globe.
Staying above water: A systemic response to rising flood risk
The latest output in the Rethinking Flood series, "Staying above water: A systemic response to rising flood risk", illustrates how the transformation of flood risk management can play out along three ways forward: Living with floods, building strategic protection, and preparing for relocation.
Preparing for a wetter world: Strategies for corporate flood resilience
Preparing for a wetter world is part of Rethinking Flood, a series of publications examining the implications of flooding for businesses, governments, and society.
Business exposure to flood risk is growing, and it is critical for firms to uncover hidden vulnerabilities propagating through their value chain. This report explores the implications of flooding for firms and presents five principles that can be integrated in Enterprise Risk Management (ERM) practices to build resilience.
Enhancing Financial Protection Against Catastrophe Risks: The Role of Catastrophe Risk Insurance Programmes
11 October 2021
The financial management of catastrophe risks presents an important public policy challenge for governments across the world. Climate change, the increasing reliance on digital technologies and socioeconomic trends such as globalisation and urbanisation are affecting the frequency and severity of the floods, cyclones, cyber-attacks and infectious disease outbreaks that produce significant financial, economic and social costs each year.
This report examines the role of catastrophe risk insurance programmes (i.e. loss-sharing arrangements within the insurance sector and often in partnership with governments) in broadening the availability of affordable insurance coverage for catastrophe risks and limiting risks to public finances.
Sunk Costs: The Socioeconomic Impacts of Flooding
'Sunk Costs: The Socioeconomic Impacts of Flooding' is the first publication in Rethinking Flood, a four-part series examining the implications of flood risk for corporates, governments, and society. The report offers an overview of the current state and trends of flood risk globally. It discusses the economic costs of flooding, its multi-sectoral impacts, as well as its societal and environmental consequences. The report highlights the potential for flood risk to exacerbate pre-existing socioeconomic inequalities and discusses the role insurance can play to protect vulnerable communities. It additionally analyzes government strategies to narrow the protection gap and enhance national flood resilience, presenting their fiscal costs and potential drawbacks.
Issue Brief: Insurance For Climate Resilience
Climate Finance Advisors
Insurance is a financial instrument that allows vulnerable households, businesses, and communities to gain financial protection from unforeseen adverse events, including climate-related natural disasters and shocks such as storms, floods, fires, and droughts.
Insuring the climate transition: Enhancing the insurance industry's assessment of climate change futures
January 2021 - UNEP FI
22 leading insurers and reinsurers from across the globe worked with UNEP FI to develop the first comprehensive guidance for the insurance industry to identify and disclose the impact of climate change on their businesses. This report represents the largest collaborative effort by market participants to pilot some of the most challenging recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).
Cities at risk – Building a resilient future for the world’s urban centres
1 October 2020
This new Lloyd’s report, commissioned before COVID-19 and published in collaboration with Urban Foresight and Newcastle University, provides a comprehensive analysis of the risks’ cities are facing and will face in the future. It looks at their impacts and how urban areas can protect themselves from these threats.
It also suggests ways in which insurers and the relevant authorities could work together to build resilience, reduce risks and develop new insurance products and services that meet cities’ risk needs. This study helps city administrators and risk managers, as well as Lloyd’s market insurers and brokers, understand the risks that will influence the design and function of cities in the coming decade, and how insurance product development could respond to these changes.
Disaster Insurance Reimagined - Protection in a Time of Increasing Risk
Published: 1 August 2023
This book is about the critical yet little-known work of “Protection Gap Entities” (PGEs), in disaster protection. Disasters, such as floods, earthquakes, and terrorist attacks, are becoming more frequent and more intense. These disasters threaten not only life, but also livelihood, causing the loss of homes and jobs that can scar the lives of those affected. Disaster insurance, by providing funds for reconstruction, plays an essential role in limiting these consequences of disaster. Yet disaster insurance is under threat in many contexts, becoming unaffordable or being withdrawn entirely.
Insurance for Climate Adaptation - Opportunities and Limitations
Published: July 2019
In this background paper submitted to the Global Commission on Adaptation, Cass Business School’s Professor Paula Jarzabkowski, Birkbeck, University of London’s Dr Konstantinos Chalkias and their co-authors make seven recommendations to maximise the benefits of insurance for climate adaptation.
Between State and Market: Protection Gap Entities and Catastrophic Risk
Published: June 2018
The challenges posed by the growing catastrophe insurance protection gap, particularly those of rebuilding in the aftermath of disaster, have prompted the generation of entities, which we label Protection Gap Entities (PGEs). These PGEs bring together market and non-market stakeholders in an effort to address the protection gap. They differ considerably in governance, political economies, points of origin, perils, and means of funding loss. Yet PGEs have the same broad goal:
To transform uninsured risk into insurance-based products that can be transferred into global financial markets to provide capital for recovery following a disaster.
Special report no 25/2018: Floods Directive: progress in assessing risks, while planning and implementation need to improve
Floods can cause injury and loss of life, considerable economic costs, and damage to the environment and cultural heritage. Serious floods have become more frequent in Europe. In recent years, more than twice as many flash floods of medium to large magnitude have been registered as in the late eighties. Climate change is an aggravating factor, triggering changes in precipitation and weather patterns, sea level rises and, consequently, more frequent and severe floods.
Guide To Government Pools
Reinsurance pools seek to provide insurance where there is none or where it is not readily available, but the demand for them is not as great as it should be. To introduce this special report, Jonathan Gale, chief executive, Bermuda Reinsurance and managing director at AXA XL, writes that the industry needs to develop a broader approach to how the risk is assumed and accounted.
Climate insurance and water-related disaster risk management - Unlikely partners in promoting development?
There is a growing consensus that insurance, risk transfer, and sharing mechanisms have an important and growing role to play, particularly in offsetting the economic impacts associated with extreme events. What is less clear is the extent to which such instruments encourage adaptation programmes and policies that would serve to minimise future loss and damage and, hence, contribute to sustainable development. This paper does not pretend to offer answers, but rather contributes to the emerging discussion and brings to that discussion a water lens.
Insurance of weather and climate-related disaster risk: Inventory and analysis of mechanisms to support damage prevention in EU
Ramboll and the Institute for Environmental Studies (IVM) were contracted by the European Commission (EC) to conduct a study on the insurance of weather and climate-related disaster risk, and to create an inventory and analysis of mechanisms to support damage prevention in the European Union (EU). The study provides an overview of the use of insurance against natural disasters. It suggests general recommendations as well as specific recommendations on the role of the European Commission in addressing the issues uncovered, and encourages stakeholder’s efforts and best practices observed across the EU.