Airmic warns risk managers to keep an eye on nat cats
Eighty-five percent of respondents in the latest Big Question survey by UK insurance trade group Airmic said their organisations are ‘very well prepared’ or ‘somewhat prepared’ for weather-related natural catastrophes.
With 2024 being the first year in which the global mean temperature exceeded 1.5°C above pre-industrial levels, the insurance protection gap for natural catastrophes stands at 60%, according to WTW’s latest Natural Catastrophe Review, Airmic said.
Julia Graham (pictured), chief executive of Airmic, said: “Risk professionals and their organisations need to build greater resilience against natural catastrophe events by preparing for the worst while hoping for the best. Besides conducting risk assessments and implementing physical protection solutions, they also need to ensure that their supply chains are adequately protected.”
The WTW report highlighted a number of “unprecedented natural catastrophes” in last year, including the floods in Valencia which was Spain’s costliest natural catastrophe.
Hoe-Yeong Loke, head of research at Airmic, said: “Events such as the tragic floods in Spain and the more recent wildfires in Los Angeles in the headlines have certainly focused attention to natural catastrophes, but risk professionals and their organisations should be even more attuned to the trajectory of increasing frequency and severity of natural catastrophe events, and prepare for them. Climate change is certainly playing a role here, albeit in more complex ways than simply that the earth is getting warmer.”
The latest Airmic Big Question survey also revealed that 42% of respondents said their organisations used flood forecasting systems. These included the use of flood alerts and warnings from the UK’s Environment Agency, as well as systems made available through their property insurers.
Leigh-Anne Slade, head of media, communications and interest groups, said: “Early warning systems are a vital first line of defence and a major part of disaster risk reduction, and Airmic members are using a wide range of such systems including the UK government’s emergency alerts which are a free service. Preparing for longer term climate change-induced patterns of natural catastrophes are also a huge concern for our members, where they share insights and intelligence in communities such as our climate special interest group.”
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