Insurance industry in the storm: record profits despite natural disasters!

Insurance industry in the storm: record profits despite natural disasters!

Holzhausen, Deutschland - The insurance industry is currently experiencing a double -edged sword: While large insurers report extensive damage caused by natural disasters, they also record record profits. According to a report by Evidence Network , the damage caused by nature events last year increased to $ 320 billion, of which almost $ 100 billion had to be taken over by the insurance companies. The increase in natural disasters is seen as undeniable in direct connection with the global temperature rise.

Arne Holzhausen from Allianz warns of a clear trend: "The growing number of natural disasters and the associated rapidly increasing damage" must be taken seriously. Munich Re also predicts an above -average hurricane season, but it remains unclear how many storms of fatal devastation will cause.

adjustments to new climate conditions required

The data of the overall association of the German Insurance Industry (GDV) are clear: In 2023, the damage caused by natural hazards in property and vehicle insurance were 5.6 billion euros. Jörg Asmussen, General Manager of the GDV, emphasizes the need to adapt cities, infrastructure and buildings to the new climate conditions. In particular, the accumulation of flood events is seen as a result of climate change, whereby society is insufficiently prepared for it. The natural hazard report 2023, which was published by GdV , contains comprehensive data with around 70 tables through natural hazards.

The forecasts are alarming: damage could be at least doubled by 2050, especially due to extreme weather events such as heavy rain, flood, storms, hail and fires. In order to counter the consequences of climate change, measures to combat and adapt are urgently required. Germany, according to Asmussen, should intensify its efforts to achieve the Paris climate goals.

Financial risks and innovative solutions

The insurance companies are not only faced with the challenge of increasing damage, but also before an increase in financial risk transfer. Through innovative financing instruments such as disaster bonds (CAT Bonds), they try to pass the risks to the financial market. These trading contracts offer high interest rates, but also contain considerable risks. Dirk Schmelzer from Plenum Investments explains how these Cat Bonds work and what challenges are associated with it.

Holzhausen calls for a global rethinking for damage prevention. Suggestions for improvement include the construction of storm and earthquake-proof buildings as well as the protection of infrastructures from flooding. In view of the growing costs for those affected, it is essential that insurance companies invest in damage receipt measures.

The current situation presents the insurance industry with massive challenges and demands a coordinated action by politics, business and society. This is the only way to manage the increasing risk to natural disasters.