With only around 25 % of catastrophe losses in Europe covered by private insurance, the European Commission has set up the Climate Insurance Alliance to stop national budgets from serving as the default insurer of last resort.
The initiative follows a summer of record-breaking climate disasters across the continent. Wildfires raged from Ireland to Greece and Croatia, and Belgium’s High Fens, while Alpine glaciers continued retreating.
The devastation included 660,000 hectares burned, 12 million tonnes of crops lost, and vital rivers like the Danube, der Rhein and La Garonne falling into critically low levels.
The human toll was equally startling, with over 35,000 deaths related to the heatwave, and healthcare facilities like hospitals and care homes pushed past safe operating temperatures.
Delivering her 2026 State of the Union Address, Commission President Ursula von der Leyen warned that while this was the hottest summer on record, it will likely be one of the coolest in years to come.
With Europe warming at double the global rate she emphasised that the green transition demands continued adaptation.
“There is no doubt: Europe can, must and will stay the course on its climate targets,” von der Leyen stated.
“This is not about mitigation or adaptation. We need both. And they need to strengthen each other. This is the only way to reach climate resilience. But we need to step up dramatically on preparedness.”
To lead that effort, the Commission will present a new framework for climate resilience next month. It will identify 100 of the most vulnerable territories in Europe, assess the risks, and establish governance guidelines from the EU level down to municipal authorities.
The framework also aims to position Europe as a global hub for adaptation technology, a huge emerging market.
“Whether drought-resistant crops, flood prevention or energy-efficient cooling, Europe is already a leader. And we must capture this market.” von der Leyen noted.
The planned Climate Insurance Alliance will form the financial pillar of this strategy, addressing the persistent 75% protection gap to safeguard national budgets against escalating climate liabilities.
