Insurance models and climate risk assessments in a historical context

Adaptation to the consequences of climate change has developed into a growing field of concern for the insurance business. However, climate-related risk is not entirely a new field in insurance. Historically, a large number of insurance organisational choices and strategies have been used to mitigate the financial impact of extreme events and uncertainties associated with climate change. Taking the case of forests in Sweden, this article reviews the ways in which climate-related risks such as storm/wind and fire risks have been assured. The study shows that climate-related risks have generally increased over time and that major hazard events have been decisive for strategy and organisation choices. Twentieth-century developments show that corporate insurance coverage increased due to higher levels of anticipated risk, while self-insurance and public insurance were reduced. However, in more recent times the expansion of corporate insurance has stagnated. Increased premiums and tighter terms following historically extreme weather events have led government and forest owners to assume more climate risks.