On 2nd February the European Commission DG CLIMA organised a workshop on insurance and climate related natural disasters. The workshop gathered an interesting mix of participants, representing Member States, the insurance industry, NGOs, city networks and international organisations. The purpose of the meeting was to share experiences and different perspectives on the topic of insurance and climate adaptation.
The first speaker was Mr Ian Clark 1 from the European Commission DG ECHO. He talked about the policy background on insurance and the EC Green paper on insurance of natural and man-made disasters and its follow-up. He noted that in policy terms there have been some interesting developments globally and within development policy. It is important now to see how we could complement the developments with actions within the EU, Mr Clark added.
Ms Carmen Bell 2 from Insurance Europe presented the insurance perspective and gave examples of local adaptation action. Among other, she stressed the importance of focusing on closing the protection gap, i.e. the gap between insured and economic losses, which requires implementation of more prevention measures and adaptation strategies and plans. The industry would also like to see a greater focus on land use planning, she added. Ms Bell noted that while insurance cannot cover all disaster risks, improvements could be made through better collection of loss data, better sharing of experiences between the markets, and better dialogue with authorities.
The reinsurance sector was represented by Mr Peter Hoeppe 3 from MunichRe and Ms Charlotte Paterson 4 from SwissRe. Mr Hoeppe presented EU and international examples of cost efficiency in dealing with natural catastrophes and climate change. His message was that while the data points to an increase in natural disasters, loss prevention measures can avoid similar increases in losses while being economically highly efficient.
Ms Paterson looked at how the insurance and reinsurance industry can support adaptation. She underlined the importance of public-private partnerships and risk-based pricing. To conclude, she presented the Economics of Climate Adaptation (ECA) methodology, intended to provide decision-makers with a tool to enable them to proactively manage total climate risk.
The workshop also heard presentations on the organisation of insurance of climate related natural catastrophes in Member States. The speakers included Mr Pedro Garret from the University of Lisbon, Mr Francisco Espejo from the Insurance Compensation Consortium, Spain, and Ms Mia Ebeltoft from Finance Norway.
The usefulness of the kind of exchange of views that the workshop provided was pointed out in the discussions and another workshop on the topic is being planned to take place before summer.
1 Ian Clark, Head of Unit A.3 – Policy and Implementation Frameworks, DG ECHO, European Commission
2 Carmen Bell, Policy Advisor, Personal Insurance & General Insurance, Insurance Europe
3 Peter Hoeppe, Head of Geo Risks Research/Corporate Climate Centre, MunichRe
4 Charlotte Paterson, Head of Governmental Affairs Europe, SwissRe
ENHANCE investigates in several case studies how existing insurance schemes could be reformed and new schemes designed to utilise the prevention role of insurance and foster multi-sectoral partnerships.
Read about the ENHANCE case studies here
A policy brief Insurance instruments and disaster resilience in Europe: Insights from the ENHANCE project will soon be published.