Climate Change and Catastrophic Risk

Natural disasters, including wildfires, hurricanes, and floods, are becoming more frequent and severe due to climate change. As a result, property and casualty insurers are facing rising claims and adjusting their pricing models to account for increased risk exposure. This is leading to higher premiums for consumers in high-risk areas, and some insurers are even withdrawing from certain regions altogether.

Reinsurance companies are also affected by climate risks, as they play a crucial role in providing financial backing to primary insurers during large-scale claims. This has resulted in a hardening reinsurance market, where prices are rising, and capacity is tightening.