NEW
YORK, Nov. 20, 2024 /PRNewswire/ -- S&P
Global Market Intelligence has released a report today showing how
evolving natural catastrophe risks due to climate change are
forcing insurers to reevaluate their relationships with each other
and the world at large. The newly published Evolving Natural
Catastrophe Risks report is part of S&P Global Market
Intelligence's Big Picture 2025 Outlook Report Series.
In this new report, S&P Global Market Intelligence's
climate, insurance and industry experts highlight how secondary
perils like floods, fires and severe convective storms — as
distinct from the insurance industry's peak perils of tropical
cyclones and earthquakes — are now making up a larger portion of
catastrophe losses in recent years. Insurers and reinsurers
are used to picking up the tab for natural catastrophes, but the
increasing frequency and severity of mid-sized events and
hurricanes hitting previously unaffected areas has led to an
overhaul of the industry's approach to those payouts.
"The insurance industry has often acted as an early warning
system for individuals and industries looking to understand and
mitigate future risk. With climate change expected to increase the
severity and frequency of natural catastrophes, understanding this
altered risk environment is paramount. Insurers have been
beating the drum on a variety of climate change risks for many
years so their current focus on extreme weather should be a
cross-industry concern," said Raymond
Barrett, lead author of the report at S&P Global
Market Intelligence.
Key highlights from the report include:
- Secondary perils such as floods and fires played a large role
in the global reinsurance industry failing to earn its cost of
capital for five of the six years between 2017 and 2022. The
knock-on effect of this new reality has insurers paying more for
cover to the reinsurance industry and retaining more risk on their
own books.
- One striking example of how the risk landscape has changed is
the damage wrought by Hurricane Helene in North Carolina. Hurricanes generally cause the
most destruction in coastal regions but in this case the
Appalachian Mountains saw some of the most severe devastation from
the storm. However, a significant portion of the economic losses
caused by Helene are not insured, as flooding falls outside the
terms and conditions of most insurance policies in the U.S.
- It has been a costly 2024 so far for European-focused insurers
after two large floods hit the central and eastern parts of the
continent. S&P Global Sustainable1 data shows that the
northernmost part of Germany will
be particularly susceptible to increased pluvial flooding in the
2050s.
- These findings highlight the necessity for robust
infrastructure design and prioritizing flood-resistant
construction. As drought, water stress and localized flooding risks
intensify, strategic planning and proactive risk management will be
vital to safeguard against evolving climate challenges.
To request a copy of the Evolving Natural Catastrophe
Risks report please contact press.mi@spglobal.com
S&P Global Market Intelligence's opinions, quotes, and
credit-related and other analyses are statements of opinion as of
the date they are expressed and not statements of fact or
recommendation to purchase, hold, or sell any securities or to make
any investment decisions, and do not address the suitability of any
security.
About S&P Global Market Intelligence
At S&P Global Market Intelligence, we understand the
importance of accurate, deep and insightful information. Our team
of experts delivers unrivaled insights and leading data and
technology solutions, partnering with customers to expand their
perspective, operate with confidence, and make decisions with
conviction.
S&P Global Market Intelligence is a division of S&P
Global (NYSE: SPGI). S&P Global is the world's foremost
provider of credit ratings, benchmarks, analytics and workflow
solutions in the global capital, commodity and automotive markets.
With every one of our offerings, we help many of the world's
leading organizations navigate the economic landscape so they can
plan for tomorrow, today. For more information, visit
www.spglobal.com/marketintelligence.
Media Contact
Sabrina Mayeen
S&P Global Market Intelligence
+44 207-176-0495
sabrina.mayeen@spglobal.com or press.mi@spglobal.com
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SOURCE S&P Global Market Intelligence
