ICAR 2019: Climate change is here. Where to the insurance industry?

8 August 2019 — Daniela GHETU
If the 2010 floods, one of the most destructive events that affected Poland in 2010, had taken place in 2018, it would have cost EUR 3.8 billion, which in local currency means by 20.9% more than in 2010.

Increased intensity of natural disasters, a direct consequence of the climate change and global warming, is already visible. Additionally, economic development resulted in higher risk exposure as it increased the value of both private and public property.

The 2010 flood caused in Poland direct losses amounting to EUR 3.2 billion, i.e. approx. 1% of GDP. This is the estimated amount of destroyed private and public property as well as agricultural losses caused by flooding of arable land and pastures. The three flood waves recorded throughout the year resulted in 24,000 affected families in 14 provinces, with losses caused by flooding of apartments and houses being estimated at EUR 0.47 billion, an amount which covers not only the costs of renovation or reconstruction of property but also losses in movable property (vehicles, furniture, household appliances, electronic equipment, etc.).

This example provides a relevant illustration of what the climate change's impact may be at local level. A report prepared by Deloitte for the Polish Association of Insurers (PIU) this year provides not only for some relevant examples as the above one, but also for an inventory of the joint solutions that the public authorities and the insurance market may put in place to improve regional resilience to NatCat risks.m In addition, one should not forget that the above figures apply to a country where about 90% of the agricultural buildings and about 60% of all the other buildings (commercial buildings or single-family residential buildings) are insured. In the Central and Eastern Europe, only a few countries can pride themselves with such high percentages of the insurance coverage (Poland, Czechia, Hungary and to a lesser extend Slovenia and Slovakia). This means that for any of the other countries in the region, the increased frequency and intensity of natural disasters may lead to quite difficult situations, becoming a significant burden on the public budgets and a very serious threat for the future wellbeing of many families.

Rafal MANKOWSKI, Expert and Agnieszka DURSKA, Communications Expert with the Polish Chamber of Insurance (PIU) will present at ICAR 2019 - the International Catastrophic Risks Forum, the main conclusions of the report, as well as the actions taken by PIU to raise awareness and stimulate household insurance take up. The event will take place in Bucharest, on 8 October 2019.

Click here to find out more details on ICAR 2019.

Online registrations are opened at http://www.icarforum.ro/en/registration/