Building climate resilience is a shared responsibility

Insurance Europe has responded to a European Commission (EC) call for evidence on climate resilience and risk management. In its response, Insurance Europe welcomes the EC's efforts to set up an integrated framework, underlining that action is crucial as climate-related events become more frequent and severe.

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 as inflation and 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:

• While adaptation is essential, mitigation remains the first line of defence. Indeed, adaptation will become increasingly difficult in the absence of drastic reduction in greenhouse gas emissions;
• Prevention measures are key to keeping risks insurable; priority areas include enhanced awareness-raising efforts, resilience certification schemes and transparent disclosure to households and businesses;
• 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;
• Better data access and proportionate data-sharing frameworks are needed to support effective prevention;
• 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.
• It is key to have a paradigm shift from reactive disaster payouts to ex-ante funding for resilience-building. In this regard, the Commission could explore creating an EU-level Climate Resilience Investment Fund to finance upgrades in vulnerable communities and high-risk sectors.