Peripatetic Event

The Importance of Addressing the Insurance Protection Gap in Europe

Despite increasingly common disasters and extreme weather events in Europe, there remains a massive insurance protection gap across the continent. This means that while states and areas are at risk of experiencing devastating catastrophes, there are serious gaps in their insurance plans, leaving them vulnerable to significant economic impacts.

In 2023, Europe experienced historic financial losses from disasters, with over $77 billion of damage done to the continent that year – the highest figure ever recorded. These losses have further exposed the insurance gap, showing that many European countries aren’t financially protected if the worst happens. In fact, some states in the continent are only covered for less than 5%of climate-related catastrophes.

Getting Worse Before it Gets Better

European climate projections indicate that intense weather events like droughts, wildfires, and storms will become more frequent in the area, illuminating that the impacts of lacking insurance could become even more significant. While ideally, insurance would be more available, this isn’t plausible for many European states with today’s mitigation strategies.

The Complications of Climate Insurance

One issue lies in the fact that many countries will experience certain weather events historically, and improve insurance against them, without accounting for High Impact Low Probability(HILP) Events. This means that while they might enhance protection against certain events, they won’t invest in insurance for things that could cause them massive damage, or lack the means to insure against persistent disasters sufficiently.

For example, Slovenia exists at high risk of floods and earthquakes, however, it’s not well-insured in the case of either event taking place, despite having consistent flooding issues throughout history.

Historically, the majority of damage done to the country has been the result of floods and windstorms, prompting insurance levels to increase in case of both events. Despite this, only windstorms are sufficiently covered in Slovenia today, with floods still a major risk. Similarly, historical earthquakes have occurred in sparsely populated areas, resulting in minimal damage and a lack of insurance. However, the levels of seismic activity in the country indicate that it’s only a matter of time before a catastrophic event.

There are examples of comparable dynamics that can be seen all across Europe.

Data Interpreted from EIPOA’s Insurance Protection Gap Dashboard

Insurance Affordability and Beyond

With affordable insurance policies often implausible, the answer more likely lies in stronger prevention and adaptation methods, making policies more affordable and available. Beyond insurance, having stronger disaster management and mitigation plans reduces the need for as significant insurance plans, protecting people’s property and lives more effectively.

Learn More From Dr. Marie Scholer Méndez @ Disasters Expo Europe

To expand on this topic in more detail, there’s no one more qualified than Dr. Marie Scholer, Senior Expert on Policy at EIOPA. She’ll be giving a Keynote Seminar titled “Reducing Risks at the Core to Address the Insurance Protection Gap In Europe” at this year’s Disasters Expo Europe.

Introducing Dr. Scholer

Dr. Scholer joined the EIOPA, leading the network of catastrophe risk experts with a focus on sustainable finance strategies. Before joining the EIOPA, Dr. Scholar was a core Risk-Controlling Actuary at R+V Re and the Senior Catastrophe Modeller for Zurich Insurance. With her Ph.D. in Geophysics and career in the financial sector, she’s the perfect person to dig deeper into this topic at Disasters Expo Europe.

To learn the ins and outs of this topic and absorb huge amounts of relevant expert knowledge, make sure to register for your complimentary ticketsto the event today.

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