Insurance and natural disasters in Europe

Flooded street

Flooded street


Jens Christian Riise

Jens Christian Riise

Market Manager
T: +45 5161 2663

Xavier Le Den

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

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.

Ramboll 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.
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.

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.

Floods, droughts, windstorms, heat and cold waves, cloudburst are examples of extreme weather events causing insurable damage in the EU. Insurance can be an effective tool to deal with risks of climate and weather related events as it contributes to preparedness for and awareness of these events. Ramboll conducted an inventory of existing coverage of insurance mechanisms, looking at how effective they are in terms of incentivising risk reduction and decreasing damage cost and then used the findings to set out future options for policy makers and stakeholders. The project involved a team of experts from Ramboll Management Consulting (EU), Ramboll Water and Climate Adaptation and the Institute for Environmental Policy from the Amsterdam University.

More information

The insurance industry as a potential driver for climate resilience

Amplifying the contribution of the insurance industry to building resilience

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