The world is warming at an unprecedented rate , with global temperatures increasing faster than at any point in recorded history . This rapid warming is altering weather patterns , leading to more extreme weather events , and disrupting the delicate balance of ecosystems . According to NASA , the planet ’ s average surface temperature has risen by about 1.2 degrees Celsius since the late 19th century .
The World Meteorological Organisation reports that the last decade was the warmest on record , with 2020 tying with 2016 as the hottest year ever recorded .
“ As climate change increases , the frequency and severity of extreme weather means insurers are exposed to storm damage , drought , floods and fires . The response has been to raise premiums , or pull out of markets altogether , further impacting the affordability and availability of home and fire insurance ,” says Rory Yates , Chief Strategy Officer at EIS .
“ When recent data indicated a higher flood risk than previously estimated for Austin , Texas , the cost of insurance soared . In the first half of 2023 alone , premiums rose by up to 16 %.”
This trend is not isolated to the US . Across the globe , climate change is driving up insurance costs .
“ For instance , in the UK , the Association of British Insurers ( ABI ) reports that firms expected to pay out £ 219m for subsidence claims last year , the highest bill since 2006 , when parts of the country experienced severe drought ,” Rory notes . “ As climaterelated risks increase , the insurance industry is grappling with the financial fallout , impacting homeowners worldwide .”