The European Commission is preparing a major plan to make European society more resilient to the effects of climate change (the so-called Climate Resilience Framework). In addition, a special European alliance has been announced that should focus on insurance. The Association warns that this plan should not only be about taking out more insurance, but should mainly focus on preventing the damage from occurring in the first place. "The European agenda must focus much more broadly on prevention, adaptation and risk reduction."
Not just repair, but prevention
The idea behind the call is that it is not only about how we can compensate damage afterwards with a claims settlement that offers residents certainty. It is also about - in addition to helping customers - strengthening society to prevent things from going wrong. "Think of better spatial planning, smart building regulations and investments in water management. In other words, making Europe climate-proof, by taking climate-adaptive measures that protect citizens," says Richard Weurding. Climate adaptation is not only necessary to limit damage, but also to ensure that risks remain insurable and affordable for citizens and businesses in the long term.
"Insurance is the last link in the chain of climate adaptation: the priority is prevention and consequence limitation, so that insurance remains a safety net and does not become an impossible task," concludes Richard Weurding.
The Netherlands as an example
The challenge is great, but the Netherlands shows that solutions are possible by combining knowledge and risk data. In Amsterdam, for example, the Amsterdam Weatherproof project is investigating how local cooperation and insurance data on climate risks can help make neighbourhoods more resilient to extreme rainfall. In agriculture, the Broad Weather Insurance shows how a combination of insurance, knowledge sharing and public support can create a safety net for climate risks that a farmer cannot absorb alone.
The layered approach
In the position paper, the Dutch insurance sector argues for a 'layered approach'. This means that the government guarantees basic safety, such as safe dykes and smart climate-adaptive cities, while the insurance sector helps by sharing risk information, absorbing residual risks and by investing in climate adaptation. With the aim of ensuring that Europe is ready for the new reality.
What else can the sector do?
In addition to damage repair, the sector can contribute to a resilient Europe in five ways:
- Early warning: Identify risks before they cause damage.
- Stimulating prevention: Helping citizens and businesses to make their homes or businesses resilient.
- Knowledge sharing: Making data available to policymakers.
- Climate-proof investing: Contributing as a long-term investor to the financing of climate adaptation, for example in infrastructure, real estate and green bonds.
- Collaboration: Establishing partnerships between government and business.
"Insurance is the last link in the chain of climate adaptation: the priority is prevention and consequence limitation, so that insurance remains a safety net and does not become an impossible task," concludes Richard Weurding.