Broker Howden is urging the insurance market to find better ways to protect poorer communities against the increasing frequency and severity of weather-related events and to build more resilience into some of the most vulnerable populations on the planet.

In a report entitled, “Climate in Peril” the broker said global insured losses from wildfires rose by 500% between 2010 and 2019. It found the value of losses in the first two years of this decade was already double that of the decade to 2010.

It said the humanitarian funding gap has grown from around £725m 20 years ago, to over £14.5bn today.

David Howden, group CEO of Howden, said: “The power of insurance both in removing barriers to the transition to a lower-carbon future, and in picking up the pieces when disaster strikes is immense. However, we cannot continue with a model that only protects those who can afford it.

“The need to deconstruct and rebuild insurance models in response to climate change is an opportunity to build back a more balanced approach, one which supports the long-term resilience of the world’s most vulnerable populations.”

Charlie Langdale, head of climate risk and resilience at Howden added: “Traditional methods of disaster relief funding cannot keep pace with demand, and existing risk transfer products cannot close the protection gap. The magnitude of the issue requires something far more imaginative and innovative, something that resets how disaster relief is funded, with insurance at its core.”

He continued: “The volcano catastrophe bond launched earlier this year for the Danish Red Cross has proven that insurance-based products can bring together charitable donations and private capital in a way that provides more funds, more quickly to those who need it. Scaling this model up unlocks significant potential to address the imbalance in accessibility, whilst creating an attractive market for investors.”

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