Authors: Antoine Bavandi Marie Ekström Robert McMillan
This paper explores the multifaceted risks, from catastrophic to chronic impacts, and proposes strategies for businesses and governments to navigate the challenges posed by climate change. While the changing nature of extreme events under global warming is difficult to predict, insurance insights are crucial for effectively managing risk.
Key takeaways
- Over 50% of businesses have experienced disruptions in their production networks due to extreme weather events, highlighting the fragility of global supply chains.
- The broader systemic vulnerabilities of the global economy are evident in disruptions caused by unrelated events such as COVID-19 and war, underscoring the need for comprehensive risk management strategies.
- Chronic impacts of climate change, such as rising temperatures and sea levels, pose ongoing risks to supply chains, affecting costs and compounding challenges for renewable-energy industries.
- Businesses can address climate-related concerns through deep mapping and risk analysis, using insurance industry risk modelers to enhance resilience.
- Innovative insurance solutions, including parametric products, offer effective risk pricing and favorable business interruption cover terms to addressing evolving extreme events
