Insurance is a tool for financial risk management used by individuals, organizations, governments and businesses to safeguard themselves against the risk of uncertain financial losses, such as those occurring as a result of damage during an unexpected disaster. However, providing insurance in areas prone to natural hazard events (for example wildfires, droughts, storms, floods) has long been a challenge, and as extreme weather events around the world become more frequent and severe, the increasing cost of the damage they inflict is pushing the industry to breaking point in certain areas. Since the 1970s, damages from weather-related disasters have increased seven-fold, with 2022 alone seeing $313 billion in global economic losses. Climate change is dramatically shifting the landscape of risks, with the number of severe and frequent disasters forecast to double globally by 2040, causing insurance prices to rise and threatening the viability of insurance as an option for many. As we see areas around the world being hit with increasingly expensive damages and being pushed towards a tipping point of “uninsurability”, this report delves into the various underlying drivers of the problem, and the actions we can take to avoid it. This technical background report for the 2023 edition of the Interconnected Disaster Risks report analyses the root causes, drivers, impacts and potential solutions for the space debris risk tipping point our world is facing through an analysis of academic literature, media articles and expert interviews.
Authors
- Pages
- 26
- Published in
- Germany
