Climate change to hit insurers

Cape Town - Catastrophic climate change will hike up insurance companies' losses.

What is more, the vagaries of climate mean that insurers will have to boost their capital reserves to limit risks, explained insurance-industry leaders on Sunday.

Andreas Spiegel, vice-president for risk management at international reinsurer Swiss Re, told the United Nations Environmental Programme (Unep) funding initiative summit that his company continually needs to factor in the latest scientific information on climate change when quantifying risk.

By 2030, according to studies, insurance losses and the cost of adapting to climate change in certain areas could run to as much as 19% of the particular region's gross domestic product (GDP). The total impact on global GDP could be anything from 1% to 10%.

Vanessa Otto-Mentz, head of Santam's strategy unit, said Santam had already begun communicating with clients about their exposure to climate risks, for example for certain properties in the coastal town of Knysna.

She said the cost of insuring vulnerable coastal properties could rise.

Spiegel noted that Swiss Re was endeavouring to include climate risk in premiums, and would have to adjust its capital reserves annually in line with the calculated risks.

- Sake24.com

For more business news in Afrikaans, go to Sake24.com.