Physical climate change risks - Highlights and implications for the insurance sector

In May, the European Insurance and Occupational Pensions Authority (EIOPA) published a paper on the materiality of the insurance sector’s exposure to physical climate change risk. The report investigates property, content, and business interruption insurance against windstorm, wildfire, river flood, and coastal flood risks. In this briefing note, we highlight the most important results from EIOPA’s analysis of three catastrophes: the 2020 windstorm Ciara in central Europe, the 2017 forest fire in Portugal, and a 2013 flood in five countries. We discuss: 

• Current coverage and premium in sample
• Standard formula SCR in sample
• Historical claims
• Future trend and next steps