Insurers, in check in the face of climate change

The damage caused by natural disasters is becoming more severe due to climate change. These effects are already being felt by insurance companies. For some, the business could no longer be profitable.

The logic of insurers is that many people take out insurance, a few suffer damage and are then reimbursed. However, if it is no longer a few who suffer damage, but more and more people, then the insurance company will pass this greater risk on the insured. In other words, insurance premiums will go up. After all, it only makes sense for an insurance company to offer benefits if you make a profit. Insurance companies are being overwhelmed by the number of extreme events, so they are turning to reinsurers, such as Munich Re. This German company has been researching the effects of climate change for its own commercial interests for about 50 years. “Basically, if the losses increase, someone has to pay for them,” says Ernst Rauch, a climate expert at Munich Re.

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