Climate change: Financial crisis looming due to extreme weather in Germany!

Climate change: Financial crisis looming due to extreme weather in Germany!

Extreme weather events such as heat waves, storms, and forest fires are no longer just sporadic phenomena; They now represent a serious threat to the economic structure worldwide. A current report from n-tv shows the dramatic effects of these developments on the financial markets and the insurance industry. In Germany, for example, historic hot days with temperatures of up to 39.3 degrees were recorded in Andernach, while violent storms and major fires can be observed in eastern Germany. At the same time, the UN warned of over 150 climate disasters worldwide last year.

The risks associated with natural disasters are growing. According to the World Property and Casualty Insurance Report by Capgemini and Qorus, the number of insured losses has increased 3.6 times over the last 30 years, while uninsured losses have doubled. As a result, the challenges of climate change are a top priority for 40% of insurers surveyed Capital reported.

Financial burdens on the insurance industry

The insurance industry is facing frightening times as rising temperatures mean that many risks are no longer insurable. In the Ahr Valley, the premium for natural hazard insurance is now up to 2,700 euros annually. The General Association of the Insurance Industry (GDV) even predicts that residential building premiums will double in the next ten years. In California, due to increasing catastrophe risks, insurance companies have reduced their new home insurance business, which has serious, significant consequences for the real estate markets.

In the US, large parts of Florida have been hit by the real estate market due to skyrocketing insurance costs. A US Senate report warns of a possible collapse in real estate values ​​that could trigger a new financial crisis. These risks are not just important to insurers; Banks could also be severely affected. Properties that become uninhabitable in certain regions lose all value, which could lead to a credit crunch.

Strategies for a climate-resilient future

To meet these challenges, insurers must make structural changes. Successful companies rely on strong governance, use data to prevent risks and invest sustainably. Recommendations for action from the latest report indicate that integrating climate resilience into sustainability strategies is imperative. In addition, clear distribution of tasks in management should be created and the technology strategy redefined.

In addition, 82% of top climate resilience performers have installed a sustainability officer, compared to the industry average of just 52%. 77% of these companies integrate climate risks into their products, compared to just 29% for the industry average. These developments are also in the context of a global protective umbrella against climate risks, which was launched by the G7 and is intended to facilitate aid in the event of disasters.

The vision of a world without a functioning financial sector due to existential risks is increasingly described as bleak. It is all the more important that consumers adapt their policies to the real effects of climate change and check natural hazard insurance, especially in high-risk areas.

In view of these developments, climate change is seen not only as an ecological but also as a fundamental economic threat that casts its shadow over financial markets.