Climate change: Experts warn of unaffordable insurance due to extreme weather.

Climate change: Experts warn of unaffordable insurance due to extreme weather.

According to a report by www.stern.de,

Experts warn that climate change could lead to increasingly extreme weather events. The insurance industry is also sounding the alarm and warning of the invaluable consequences that could arise from this development.

According to R+V CEO Norbert Rollinger, who is also President of the General Association of the German Insurance Industry (GDV), building insurance is becoming unaffordable in some cases due to climate change. He states that if global warming reaches three or four degrees, insurance coverage in the building sector will no longer be possible. This causes insurance to become unpredictable and very expensive, meaning they can no longer provide a commercially viable offer.

Experts warn that every additional tenth of a degree of warming could have even more catastrophic consequences in the form of extreme weather events. According to Rollinger, measures must be taken to adapt to climate impacts, otherwise insurance premiums would double in the next few years.

From an economist's perspective, this means that rising insurance premiums will increase the financial burden on consumers and businesses. In addition, certain risks may no longer be insurable at all, which would lead to increased financial liability in the event of damage. This could, in turn, lead to a decline in investment in vulnerable areas and negatively impact property prices.

Overall, the increasing unaffordability of insurance due to climate change is leading to increased economic uncertainty and stress, which will also impact the insurance market itself. Companies will be forced to adapt their risk management strategies to deal with the new realities of climate change.