GlobalData’s survey reveals that extreme weather events exacerbated by climate change are leading to an increase in home insurance denials for consumers. Meanwhile, a report from Swiss Re highlights the favourable cost-benefit ratio of flood adaptation measures, demonstrating substantial advantages for all stakeholders involved in addressing these pressing issues.
According to GlobalData’s 2024 Emerging Trends Insurance Consumer Survey, a substantial 53.1% of respondents globally reported being denied coverage due to residing in coastal or high-flood-risk areas, with this figure escalating to 71% in the UK. This trend presents a significant challenge, as it leaves vulnerable communities without adequate protection, with insurers perceiving the associated risks and potential costs to be too significant. This increasing awareness among consumers underscores the urgent need to prioritise preventative measures that offer strong protection against the impacts of climate change.
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According to a report by Swiss Re, effective flood prevention measures—such as dams, flood gates, and dikes—can significantly reduce damage costs by up to tenfold when designed optimally. Implementing adaptation strategies would not only reduce risks for insurers but also enable them to effectively address the rising demand for insurance among vulnerable communities in an increasingly unpredictable climate. The concerning figures regarding home insurance denials due to property location are likely to worsen as the impacts of climate change intensify. To address this issue, a collaborative investment in flood adaptation infrastructure by both the public and private sectors is essential. Such strategic investments can ease the financial strain on insurers, potentially leading to lower premiums and expanded coverage options for policyholders. By prioritising climate adaptation, this joint effort can ensure broader access to home insurance, mitigate risks for insurers, and foster a more inclusive insurance market that protects vulnerable communities from the adverse effects of climate change.
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Swiss Re Ltd