Insurers are now suffering 3.6 times more losses from natural catastrophes than they were three decades ago, according to new research, which suggests insurance companies are being hit by the impacts of climate change.
Natural catastrophe events are costing insurers around the world 250 per cent more than they were 30 years ago, due to an increase in events such as flooding, storms, and wildfires.
In 2021 alone, storms in the US cost insurers $60bn, while floods in Germany cost $9bn and wildfires in Australia cost insurance firms another $63bn.
The costs associated with climate change events are also set to rise in coming decades, as current policies are set to see 2.4°C of warming by 2100, the report from French consulting firm Capgemini and the European Financial Management Association (EFMA) says.
However, the report says climate change also poses an opportunity for insurers, as it claims climate risks are set to account for around 30-40 per cent of the $2.5trn increase in global insurance premiums over the next two decades.
Major investment of $3trn- 6trn per year into the roll out of renewables and other sustainable technologies could also create opportunities for insurers, the report says.