Report: Responding to the Climate Change Challenge 2021
2020 was the warmest year on record across Europe, and, according to scientists, it broke the previous high mark by a significant distance. Temperatures across the region were more than 1.9C above the long-term average between 1981 and 2010. Recent wildfires raging across the United States and Canada, with some of the largest fires in history burning in California, prompted Chaucer to conclude that wildfire should now be considered a primary peril by the industry. Catastrophic floods that swept across Germany and Belgium in July 2021 stunned scientists, and drove the Belgian Minister of Home Affairs, Annelies Verlinden, to describe the events as “one of the greatest natural disasters our country has ever known.” The 2021 Atlantic hurricane season has had a record-setting start, according to the National Oceanic and Atmospheric Administration (NOAA), with Hurricane Ida unleashing torrential rains causing devastation across U.S. Northeastern states (read more below).
The UN´s Intergovernmental Panel on Climate Change (IPCC) report, released in August 2021, stated that, “It is unequivocal that human influence has warmed the atmosphere, ocean and land.” The crucial warming threshold of 2°C “will be exceeded during the 21st century”, the IPCC authors concluded, without deep emissions cuts “in the coming decades.”
There is no doubt that the severity and probability of climate change hazards are becoming greater. Predictions are that fires, flooding, and droughts will increase with long-term and devastating ramifications. Although scientists and experts continue to debate on the extent to which climate change is attributable to human intervention and whether global warming will progress, what is undeniable is the growing frequency of natural catastrophe-related losses this century.
Our report, ´Responding to the Climate Change Challenge 2021´, covers some of the recent natural catastrophes that have taken place this year and the challenges they present to the insurance sector, with commentary from industry stakeholders on how Insurers have responded to the climate change crisis.