Climate Change's Impact on Insurance Industry

Climate change is significantly impacting insurance markets, with rising premiums and delayed payouts for families affected by extreme weather events, as seen in Australia. A Senate inquiry revealed that many families struggle to afford adequate insurance coverage amidst escalating costs, prompting calls for deep emissions reductions to mitigate these challenges. Meanwhile, in New Zealand, a parliamentary report emphasizes the urgency of adapting to climate risks, advocating for a cross-party approach to manage natural hazards effectively. The Insurance Council of New Zealand supports improved data on climate risks to enhance community awareness and resilience. Additionally, a workshop in the UK highlighted the importance of collaboration between academia and the insurance sector to better utilize climate data in risk assessments. Despite advances in automation, human empathy and judgment remain crucial in claims management within the insurance industry.