Great (and relatively short) report from an international insurance think tank on ocean warming impacts and implications for insurance and reinsurance. It’s great to see this science-based call on the industry to promote both mitigation and adaptation (and I could see using the section on impacts to help put together a science talk!)
From the Exec Summary:
Due to the limits of predictability and scientific understanding of extreme eventsin a non-stationary environment, today’s likelihood of extreme events is ambiguous. As a consequence, scenario-based approaches and tail risk modelling become an essential part of enterprise risk management.
In some high-risk areas, ocean warming and climate change threaten the insurability of catastrophe risk more generally. To avoid market failure, the coupling of risk transfer and risk mitigation becomes essential.
“The interplay between the potential of rising risk levels and insurance demand, but decreasing self-protection, could create a risk environment that is uninsurable in some regions. Examples for markets with this potential are U.K. flood or Florida wind storm insurance.”
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