Greater collaboration needed to tackle extreme weather events

As the latest ABI property claims data reveals payouts have now reached a record £4.1b, leading audit, tax and consulting firm RSM UK says insurers, policymakers and businesses need to work together more closely to address the root causes of extreme weather events.

Erin Sims, financial services senior analyst at RSM UK, said: “The record-breaking insurance payouts seen this year highlight the mounting financial strain that extreme weather events are placing on consumers and businesses across the UK. These trends reflect the urgent need for collective action to mitigate the causes of climate change and address its devastating consequences.

“These figures paint a stark picture of the impact of climate change on our economy and communities. Global temperatures have already risen over 1.1°C since the mid-19th century, and projections suggest we may reach the critical threshold of 1.5°C warming by the 2030s. Risks then rise with each additional degree increase. Extreme rainfall events have already become 60% more frequent in the UK over the past century and are projected to increase further by 85% by 2080 under a high-emissions scenario.

“Without effective measures to combat the root cause, costs of extreme weather will continue to spiral. Insurers, policymakers and businesses must work together to reduce emissions and invest in sustainable and robust infrastructure and planning.

“The insurance industry is still putting pressure on the government to invest more in flood defences. There are also calls for broader reforms to planning consent for buildings in flood-risk areas. Businesses can also play their part in developing sustainable and resilient infrastructure that reduces emissions and also leverage technology to monitor their emissions and optimise energy consumption. The insurance industry also has a vital role to play in encouraging businesses to invest in sustainability by offering reduced premiums, structuring premiums to reflect the resilience and sustainability of the infrastructure that is being insured.”