Enhancing the insurance sector’s contribution to climate adaptation
Insurance coverage plays an important role in protecting households, businesses and
governments from the financial impacts of climate-related disasters. However, climate
change is expected to increase the frequency and/or intensity of a range of climate-related
(weather) perils and could potentially limit the availability of affordable insurance
in the future. Risk reduction through adaptation to climate change will be the only
sustainable means to limit the increase in future climate damages and losses and potential
disruptions to insurance markets. This paper examines the contribution of the insurance
sector to climate adaptation. It outlines some of the challenges to assessing future
climate risks, encouraging policyholder risk reduction and supporting resilient reinstatement.
The paper also identifies potential approaches that policymakers, regulators and supervisors
could consider to support a greater contribution of the insurance sector to climate
adaptation.
Published on March 28, 2023
In series:OECD Business and Finance Policy Papersview more titles