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Climate Change and the Insurance Sector

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  • Andrew Dlugolecki

    (Earlybank, 17 Craigie Place, Perth PH2 0BB, U.K.)

Abstract

Climate change matters to the insurance sector. In terms of underwriting, on one scenario, the economic cost of weather losses could reach over 1 trillion USD in a single year by 2040. The impacts will be worse in developing countries. The private sector needs to work with the public sector, as part of a “triple dividend” approach that coordinates adaptation, disaster management and sustainable economic development. For asset management the indirect impacts are key. Greenhouse gas emissions have to drop by 60 per cent by 2050, which means transforming the energy economy. Finance for renewables will reach 100 billion USD a year soon. Political uncertainty is a serious blockage to market forces, and the re-evaluation of assets and project returns is happening too slowly. Finally, insurers have a duty as ubiquitous players in the economy and society to help to shape climate policies in a responsible and effective way. The Geneva Papers (2008) 33, 71–90. doi:10.1057/palgrave.gpp.2510152

Suggested Citation

  • Andrew Dlugolecki, 2008. "Climate Change and the Insurance Sector," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 33(1), pages 71-90, January.
    • Handle: RePEc:pal:gpprii:v:33:y:2008:i:1:p:71-90
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    Citations

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    Cited by:

    1. Liu, Bing & Yin, Weijun & Chen, Gang & Yao, Jing, 2023. "The threshold effect of climate risk and the non-linear role of climate policy uncertainty on insurance demand: Evidence from OECD countries," Finance Research Letters, Elsevier, vol. 55(PA).
    2. Eakin, Hallie & Keele, Svenja & Lueck, Vanessa, 2022. "Uncomfortable knowledge: Mechanisms of urban development in adaptation governance," World Development, Elsevier, vol. 159(C).
    3. Biener, Christian & Eling, Martin & Schmit, Joan T., 2014. "Regulation in Microinsurance Markets: Principles, Practice, and Directions for Future Development," World Development, Elsevier, vol. 58(C), pages 21-40.
    4. Stine Aakre & Ilona Banaszak & Reinhard Mechler & Dirk Rübbelke & Anita Wreford & Harvir Kalirai, 2010. "Financial adaptation to disaster risk in the European Union," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 15(7), pages 721-736, October.
    5. Ozili, Peterson K, 2020. "Effect of climate change on financial institutions and the financial system," MPRA Paper 103317, University Library of Munich, Germany.
    6. Mohor, Guilherme Samprogna & Mendiondo, Eduardo Mario, 2017. "Economic indicators of hydrologic drought insurance under water demand and climate change scenarios in a Brazilian context," Ecological Economics, Elsevier, vol. 140(C), pages 66-78.
    7. Ozili, Peterson K, 2021. "Managing climate change risk: a responsibility for politicians not Central Banks," MPRA Paper 113468, University Library of Munich, Germany.
    8. Biener, Christian, 2013. "Pricing in Microinsurance Markets," World Development, Elsevier, vol. 41(C), pages 132-144.
    9. Shu-Ling Chen & Yu-Lieh Huang, 2014. "Actuarial Implications Of Structural Changes In El Niño-Southern Oscillation Index Dynamics," Annals of Financial Economics (AFE), World Scientific Publishing Co. Pte. Ltd., vol. 9(02), pages 1-20.
    10. Lipika Bhattacharya & Ayan Chatterjee & Debmallya Chatterjee, 2023. "Critical Enablers that Mitigate Supply Chain Disruption: A Perspective from Indian MSMEs," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 48(1), pages 42-63, February.
    11. Tovar Reaños, Miguel A., 2021. "Floods, flood policies and changes in welfare and inequality: Evidence from Germany," Ecological Economics, Elsevier, vol. 180(C).
    12. E. Keskitalo & Gregor Vulturius & Peter Scholten, 2014. "Adaptation to climate change in the insurance sector: examples from the UK, Germany and the Netherlands," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 71(1), pages 315-334, March.
    13. Hudson, Paul & Botzen, W.J. Wouter & Feyen, Luc & Aerts, Jeroen C.J.H., 2016. "Incentivising flood risk adaptation through risk based insurance premiums: Trade-offs between affordability and risk reduction," Ecological Economics, Elsevier, vol. 125(C), pages 1-13.

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