Extreme Weather Risks May Make Parts of the World 'Uninsurable'
Soaring global temperatures may make large parts of the world “uninsurable,” according to Spain’s largest insurance firm. Climate change “has the potential of changing the insurance business profoundly and making part of the world uninsurable,” Gonzalo Gortazar, CaixaBank SA’s chief executive officer, said in an interview with Bloomberg TV Friday. “It’s not happening yet, but if we keep moving in that direction this is something we will have to face in due course.” Gortazar’s comments come as the world heads for what is likely the hottest year ever, with July set to become the hottest month on record. Temperatures in the Spanish region of Catalonia, where CaixaBank is headquartered, hit a historic high earlier in the month as a heat wave engulfed large parts of the Mediterranean. Rising temperatures are disrupting economic activity and daily life across the globe, sapping crops, drying rivers and raising sea levels. Scientists suspect the last several years have been warmer than any point in over 125,000 years. Aside from being Spain’s largest bank, CaixaBank is also the biggest insurer, offering a front-row view into the economic impact of climate change. Spain is among a group of southern and southeastern European nations — including Portugal, Greece, Italy, Bulgaria and Romania — vulnerable to desertification as temperatures rise and rainfall dwindles, fueling wildfires — as happened in recent days outside Athens. Photograph: Pedestrians keep to the shade during high temperatures in La Bisbal d’Empord, Girona, Spain, on Wednesday, July 19, 2023. Local records were smashed in Rome and Spains Catalonia the day before after the latest blast of Saharan heat. Photo credit: Angel Garcia/Bloomberg Related: Update: Greece Fights Almost 200 Wildfires as Wind Raises Risk in Mediterranean Australia’s Extreme Weather Events to Worsen as Climate Warms: Report Australia’s Extreme Climate Risks Threaten to Make Home Insurance Unaffordable Failure to Act on Climate Change Could Make Weather Risks Uninsurable: Swiss Re Was this article valuable? Here are more articles you may enjoy.
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”