The insurance industry as a potential driver for climate resilience

2 November 2017

A new study by Ramboll suggests that the insurance industry can play a central role in building resilience against extreme weather events in Europe. Public-private partnerships seem to be a key tool.



Xavier Le Den

Market Director, Strategic Sustainability Consulting
T: +32 497 89 83 58
Jens Christian Riise

Jens Christian Riise

Market Manager
T: +45 5161 2663

By Martin Zoffmann and Martin Christiansen

On behalf of the European Commission, Ramboll and the Vrije University in Amsterdam recently conducted a study providing an overview of the use of insurance against natural disasters in Europe.

- Climate change is happening, leading to an increase in severe extreme weather events around the globe. In this context, insurance has attracted much attention as a tool for building resilience to such extreme weather events by providing financial compensation for losses and incentives to reduce risk, says Project Manager, Xavier Le Den. Employed in Ramboll’s Management Consulting division the Brussel-based evaluation expert has been leading the team that also included experts from Ramboll’s global Water division alongside university researchers.

The team has been uncovering the cost-effectiveness of the use of insurance against natural disasters and the extent to which it supports damage prevention in 12 EU countries. Building on intensive data collection and broad stakeholder consultations, the study provides an overview over the features of insurance markets that can be considered best practice.

General lack of focus on risk reduction

Generally, the study finds that there is a relative lack of focus on risk reduction in the private property and agricultural sectors of the 12 EU countries.

This is made highly visible by low insurance penetration rates in private property markets, which is explained by the fact that households do not fully acknowledge the benefits of being insured against extreme weather - or that their willingness to pay is lower than the premiums charged.

High performers bundle insurance products and support public-private partnerships

Nevertheless, the study also uncovered the characteristics of the markets that performed highest in terms of these issues:

- We see higher penetration rates and lowered risks in countries that support collaboration between public and private sectors, says water specialist, Matilda Persson.

As an example of a public-private partnership Persson highlights a contract between the insurance sector and the government, whereby each group takes actions that maintain the provision of insurance coverage. One specific variation of this, a national pool for catastrophic losses, has for instance been successfully implemented in Denmark.

A main recommendation by this study is therefore to have countries create a national platform that fosters public and private partnerships to develop risk reduction strategies.

Get the full study or download the layman’s report here

Ramboll Group A/S

Ramboll Group A/S
Hannemanns Allé 53
DK-2300 Copenhagen S
Tel:+45 5161 1000
Fax:+45 5161 1001

Danish CVR numbers

Danish CVR numbers

Ramboll Group

Rambøll Danmark

Ramboll Energy

Rambøll Management Consulting

Other sites

Other sites