At COP27, the UN conference in Sharm El Sheikh, the Global Federation of Insurance Associations has called on parties to prioritise the building of resilience to the impacts of climate change to prevent loss of life and reduce economic losses from future natural disasters.
The global impact on people, health, property, businesses, and the environment from more frequent and severe extreme weather events is well documented, says The Global Federation of Insurance Associations (GFIA).
It adds that re/insurers play a crucial role in addressing climate-related risks, primarily through their measuring, pricing and assumption of risk and thus through their payment of insured claims — including life and health claims — from common and catastrophic events.
While the GFIA observes that re/insurance plays a critical role in accepting the transfer of some of the risks of these events, it adds the gap between re/insurance coverage and wider economic loss is significant in many parts of the world.
Closing this protection gap requires a reduction in losses by investing in adaptation measures that mitigate risk, suggests the GFIA, stating that without this, the gap will widen and so will the trauma for millions across the globe.
The GFIA writes, “Re/insurers recognise that greenhouse gas reduction and climate adaption require societal resolve and action by individuals, governments and the private sector. Re/insurers can function as lookouts, alerting others to increasing risk, and are willing to cooperate with all the various stakeholders in society.
“Re/insurers reiterate their determination to put their experience, commitment and assets at the service of the ecological transition, to help close the protection gap and to help build a more resilient society. As recent events underscore, there is an urgent need for all stakeholders to work together to prevent losses due to poor land use, building codes and infrastructure.
“GFIA, therefore, calls on all stakeholders to join with re/insurers in their jurisdictions and globally to confront not only climate change but also preventable loss of life and economic damage.”