Prevention first for Europe’s climate resilience framework

Insurance Europe has responded to a European Commission public consultation on the forthcoming European climate resilience and risk management integrated framework. The response, submitted on Monday 26 February, is aligned with Insurance Europe's position paper published today, Shared responsibility for climate resilience: insurance as a strategic partner, which sets out how insurers contribute to risk reduction, faster recovery and long-term adaptation across the EU.

The industry highlights that insurers see the impacts of climate change every day through rising claims costs, driven by more intense and frequent weather events, even though other factors, such continued construction in high-risk areas, also play a role. Insurance Europe also stressed that building climate resilience requires the involvement of all stakeholders, including insurers, with however a particular responsibility for public authorities.

In particular, the response notes that:

• Prevention is key to keeping risks insurable; priority areas include enhanced awareness-raising efforts, resilience certification schemes and transparent disclosure to households and businesses;
• A shift from reactive compensation to ex-ante investment is crucial. Current funding mechanisms remain overly focused on post-disaster relief. A prevention-first approach should redirect more resources towards resilience-building, while ensuring that public assistance does not create moral hazard;
• Access to high-quality, local hazard and aggregated loss data is essential for accurate risk assessment, effective prevention and informed investment decisions. Without reliable data and proportionate data-sharing frameworks, neither public nor private actors can fully understand the cost of inaction;
• Member States must take responsibility for adapting and maintaining public infrastructure, as well as incentivising resilience investments by households and companies;
• Adaptation strategies should be tailored to national and regional conditions, avoiding one-size-fits-all solutions. Any solution should be tailored to the needs of each country's distinct exposures and institutional set-up, respecting national schemes in place. Therefore, it is not evident how a centralised EU pool would deliver additional benefits beyond what existing national systems and international markets already provide, particularly given well-functioning private sector solutions, Europe's diversity in terms of risks exposures, and existing well-established public-private arrangements;
• Public-private collaboration, organized at national, regional or even local level, is indispensable. EU-level coordination in this regard can facilitate the sharing of best practices, data, and experiences to enhance risk awareness and resilience.

READ OUR CONSULTATION RESPONSE

READ OUR POSITION PAPER