The European Commission has presented an EU Framework for Climate Resilience to strengthen Europe’s ability to anticipate, prepare for and manage climate risks, highlighting re/insurance as a “crucial element” in this equation.
The framework reportedly aims to embed climate resilience across EU policies, support local and regional authorities, and encourage private-sector investment in adaptation, with an estimated €70 billion a year needed to adapt Europe’s infrastructure and economy.
Commission President Ursula von der Leyen commented, “Europe is warming at double the global rate. To become truly climate resilient, we need to adjust and learn along the way.
“Today, we are presenting a European approach to climate risks – to anticipate, to prepare for and to manage. We are ensuring that climate resilience will be included in policies across the continent, supporting investment, innovation and long-term growth.”
Alongside the framework, the Commission has proposed a Climate Resilience Law to establish common assumptions for future global warming, simplify national planning through a single strategic plan for each member state, and improve the consistency of climate risk assessments.
New online tools will also help public authorities, businesses and communities identify projected climate hazards and practical adaptation measures.
The Commission said investment in climate adaptation could generate returns of more than ten times its value through avoided losses and damage, while the global market for adaptation solutions is projected to reach €3.5 trillion by 2050.
As mentioned, the Commission identified insurance as a crucial component of Europe’s climate resilience strategy, arguing that broader coverage could ease pressure on public finances and free up resources for preventive measures.
To address the issue, it plans to establish a Climate Insurance Alliance to develop actionable proposals and explore ways to narrow the natural catastrophe protection gap. The initiative will focus on increasing insurance uptake, incentivising risk prevention and ensuring sufficient insurance capacity to cover climate-related losses.
Historically, around 25% of natural catastrophe losses in the EU have been insured, according to the Commission.
The Climate Insurance Alliance, bringing together insurance and reinsurance providers, intermediaries, investors, risk-modelling experts, regulators and public authorities, is expected to deliver its first set of actionable measures by the end of 2027.
These will focus on increasing insurance uptake through greater risk awareness, clearer policy information and more accessible products; encouraging risk prevention through insurance incentives and improved data sharing; and assessing available insurance capacity, including reinsurance and catastrophe bonds, to ensure sufficient cover for natural catastrophe risks.
Separately, Insurance Europe welcomed the announcement as an important step towards strengthening Europe’s preparedness for climate change, with prevention, adaptation and shared responsibility at its core.
Frédéric de Courtois, President of Insurance Europe, said, “This summer once again showed that climate change is a hard reality that requires collective action, in both the short and the long term.
“This Framework is a chance to move resilience higher up the policy agenda and to recognise that decisions on land use, infrastructure, building standards and adaptation will determine Europe’s exposure to climate risks for decades to come.”
Thea Utoft Høj Jensen, Director General of Insurance Europe, added, “The Climate Insurance Alliance is a great opportunity to bring together policymakers, public authorities, the insurance sector, experts and relevant voices from across the resilience ecosystem to develop actionable measures that build on what is already working.
“Success will depend on it. The expertise in risk management and mitigation of the insurance industry is fundamental for developing solutions to reduce protection gaps and strengthen resilience in Europe.”
Robin Matthias, Global Head of Zurich Resilience Solutions also commented on the new framework, saying, “As weather events become more frequent and more destructive, Europe faces the choice of investing in resilience now or paying a far higher price later. Whether we are planning new homes and public buildings, logistics hubs or energy infrastructure, resilience needs to be built in from the very beginning to support better-informed investment decisions.
“The new EU Framework for Climate Resilience presents an opportunity to turn resilience into a shared priority of the public and private sectors and to align efforts across Europe. Insurers with their risk management expertise and insights have a critical role to play to help governments, businesses and communities make smart decisions to protect Europe’s long-term economic and social resilience.“
