The effects of climate change are wreaking havoc in much of the world, which is also linked to the large insurance gap in some regions. Asia It is the area in the world with the largest insurance protection gap, 82.8%, which means that only 17.2% of total losses due to risks related to natural catastrophes are covered by insurance contracts. The high insurance gaps for natural catastrophes (CatNat gap) in many regions are mainly due to a low insurance penetration in many emerging economies, as well as a greater concentration of the population in cities and high risk areasand a greater frequency and severity of extreme events due to climate change.
These are some of the conclusions of the report ‘Climate Change, Extraordinary Risks and Public Policies’, which MAPFRE Economics presented within the framework of COP30. According to most experts, global warming plays a determining role in the intensification and frequency of climate-related natural disaster events, and in particular, in the so-called ‘secondary risks’, climate events of lower intensity and greater frequency, such as wildfires, droughts, heat waves, storms, high winds, floods and snowfallamong others, which, in the current context of insurance and reinsurance activity, cause increasingly greater impacts in terms of human lives and economic losses. lace insured losses derived from catastrophic phenomena have shown a ascending trend sustained in the long term, placing itself, according to the Swiss RE Institute, in a range of annual growth of 5% to 7% since 1992.
“Climate change represents one of the main challenges for social and economic stability and it is a challenge of the first magnitude for the insurance activity, which must be a key actor when it comes to raising the levels of protection and well-being of society“This is highlighted by Mónica Zuleta, corporate director of Sustainability at MAPFRE, who has indicated that MAPFRE wants to become a neutral company in 2030 in all countries and NetZero in2050, promote the fair energy transition and develop innovative solutions that support decarbonization and adapt to new climate demands, with coverage for support renewable energy, electric mobility and regenerative agriculture, among others. In this sense, he has made reference to some of them, such as the parametric insurance, that MAPFRE promotes thanks to the investment in Blue Marble; the development of catastrophe bonds, that function as insurance and allow the risk of natural catastrophes to be transferred to capital market investors; and the MAPFRE Renewable Energies II fund, an innovative project in Europe that invests in biomethane, a 100% green biofuel.
The full report is available at: ((LINK:EXTERNAL|||https://www.fundacionmapfre.org/publicaciones/todas/informe-cambio-climatico/”>))