In the past few years, there has been a marked shift in public opinion regarding climate change. The increase in significant weather disasters, not only in vulnerable developing countries but also in wealthy ones, is one of the driving forces.
Despite shifting opinions, the prevailing response to the threat of climate change has largely been inaction. Residents and businesses continue building or rebuilding in disaster-prone areas that will become increasingly at risk from climate-related disasters, particularly on the coast, on floodplains, and in the wildland-urban interface—a region most at risk for wildfires.
As an industry whose core business is managing risk, (re)insurers are uniquely positioned to be able to create forward-thinking incentives and innovative products that can go a long way toward mitigating climate risk. For homeowners and business owners, insurers have the ability to significantly influence risk-reducing behaviors.