The insurance industry is calling on nation states to develop clear global warming adaptation strategies so that it can accurately price insurance cover to help spread the cost of dealing with the effects of climate change.
The costs of counteracting climate change-related risks, such as the increased frequency of floods and extreme weather events, are likely to run to trillions of dollars, but insurers are arguing they will struggle to offer long-term cover against such threats because they still have very little insight into how economies plan to adapt to changing climate patterns.
Andrew Torrance, chairman of insurance industry coalition ClimateWise, is to tell next week's UN climate conference in Poznan, Poland that clearer adaptation plans are needed from political leaders if the insurance industry is to serve its purpose and help spread risks.
"ClimateWise members are ready to explore how best to extend the benefits of their expertise to those affected by climate risk, and governments must create the framework in which this can take place," he said ahead of the talks. " Insurance cannot be an alternative to adaptation, rather robust adaptation is a necessary condition for insurers to play a full role."
The group claims that in markets with an existing natural hazard insurance market, insurers' may struggle to continue to offer cover that is both affordable and widely-available unless clear and effective adaptation strategies are delivered. It also warns that the problem is likely to be even more pronounced in emerging markets with greater risk of extreme weather events where insurers already struggle to operate.
"The offer of insurance products to the previously uninsured or uninsurable will heavily depend on clear adaptation signals, alongside the need for open, fair, risk-based global insurance markets," the group said in a statement released ahead of the talks.
ClimateWise is also calling for an international agreement on sharing climate change data so that effects can be predicted more accurately.
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