Could Europe Become Uninsurable Against Catastrophic Weather Events?

DBRS Morningstar has released a commentary discussing the insurance protection gap on extreme weather and climate-related losses in Europe.

Key highlights include:

-- In 2021 and 2022, annual economic losses caused by extreme weather and climate-related events in Europe were at a record high of EUR 59 billion and EUR 52 billion, respectively.
-- Insured losses represented around 27% of total economic losses generated by weather-related catastrophic events in the European Economic Area, according to European Insurance and Occupational Pensions Authority data.
-- The presence of insurance sector schemes in Europe, involving partnerships with the public sector, could facilitate the reduction of the insurance gap.

“The intensification of catastrophic events’ frequency and severity could prompt to lower affordability and availability of insurance protection which is not conductive to reducing the insurance gap”, said Mario De Cicco, Vice President, Global Insurance Ratings at Morningstar DBRS. “One of the solutions involves efficient partnerships between the public and private sector, which may become more widespread across the European continent.”