The growing impact of extreme weather remains ‘at the forefront’ of concerns in the insurance and reinsurance industry, Swiss Re has said.
According to the Swiss reinsurance giant, annual natural catastrophe losses have risen ‘well above’ $100 billion over the past few years, with the potential for annual insured losses to accelerate to $200 billion, or even $300 billion, in a peak year.
Preventative measures
It is calling for increased investment in preventive measures such as improved zoning, building standards and advanced risk modelling, coupled with stronger cooperation between the private and public sectors.
‘Collective investment into loss prevention and weather resilience will be essential to help mitigate future risks,’ Swiss Re said. ‘It is also important that the industry continues to build on the solid foundations of reliable data and increased risk transparency across the value chain.’
Read more: More than two fifths of insurance professionals see environmentally friendly products as vital
Rendez-Vous de Septembre
Swiss Re was commenting as industry leaders gathered in Monte Carlo for the annual Rendez-Vous de Septembre. According to Swiss Re, along with climate change, other factors set to reshape the global re/insurance market include geopolitical uncertainty and rapid technological change, led by AI, which will require a more comprehensive approach to resilience.
“In a time of elevated global uncertainty and rapid adoption of AI, re/insurance stands as a stabilising pillar,” commented Urs Baertschi, chief executive, P&C Reinsurance. “We look forward to engaging with our clients, partners and the public sector on how to further strengthen resilience, harness technology and address the evolving challenges of a changing world.”
On geopolitical uncertainty, Swiss Re noted that increased volatility is making risk assessment more complex, while it added that AI is likely to play a ‘key role’ in further improving risk assessment and underwriting quality.
“In the face of increasing risks, data will become even more important,” added Gianfranco Lot, chief underwriting officer, P&C Reinsurance. Read more here.
