On a global level insurance is failing to cover 70% of climate change damage, and this percentage rises to 98% for developing nations, warned climate experts at the 23rd Conference of the Parties (COP23) to the United Nations Framework Convention on Climate Change (UNFCCC).
At an official side-event, COP23, organised by the Munich Re Foundation, the Munich Climate Insurance Initiative, (MCII), and an Imperial College London delegation which originally reported, Admasu Feyisa from Ethiopia’s Ministry of Finance and Economic Cooperation introduced the Climate Vulnerable Forum, which consists of 48 member countries particularly vulnerable to the impacts of climate change.
He explained that most member countries haven’t yet started implementing climate risk insurance because of financial and technical constraints.
“Over the past few decades, these countries have suffered from repeated extreme weather events. Their frequency disrupts any recovery progress, and has significant adverse effects on economic, social and environmental conditions,” he said.
Climate risk insurance – which provides financial compensation for people following climate-related disasters – is a powerful tool to build resilience to global warming trends, but financial concerns are holding up progress.
Christian Barthelt, Project Manager at the Munich Re Foundation, said; “insurance can cover many aspects of disaster risk management.
“It’s a constantly evolving process that can be understood as a cycle, incorporating research, data and constant improvements.
“This approach can bring transparency, a much greater awareness of climate-related risk, and improved resilience – if applied correctly.”
Professor Joanna Haigh, co-director of the Imperial Global Grantham Institute, said; “by looking at the changing distribution of different weather parameters, such as temperature or precipitation, we know that, as a result of climate change, some weather extremes are becoming more frequent.”
“For example, in July 2010, Russia experienced a series of heatwaves: such events used to have a 99-year repeat time but now this is reduced to about 30 years.”
Soenke Kreft, Executive Director of Munich Climate Insurance Initiative added that effective solutions are rooted in international cooperation “shared responsibility between countries, both developed and developing, access to data, and the political will to see projects through long-term.”