Finance Ministry flags need for insuring against climate risks

Climate change induced recurring set of hazards have repeatedly put people and businesses at high risk of lost assets, health, livelihoods, or even lives, with global economic losses from disasters due to natural hazards in 2022, amounting to USD 275 billion, observes a Finance Ministry note on Wednesday. However, financial coping mechanisms, such as insurance schemes, could boost resilience against such hazards as data over the past decade shows annual global insured catastrophe losses have accounted for an average of more than USD 100 billion peaking in 2017 with a payout of more than USD 154 billion. At USD 125 billion, insured losses covered 45 per cent of the damage, says the concept note.

- NIVEDITA MUKHERJEE

The Finance Ministry plans to drive global recognition of the need for countries to tap well-proven financial coping mechanism such as insurance schemes that could boost resilience against such hazards through a regional workshop on the role of insurance in financing climate risks. This seminar will bring together insurers, public authorities, and related stakeholders to discuss how to more extensively tap and leverage the very promising technical expertise and financial strengths of the insurance industry.