European non-life insurers increasingly vulnerable to the effects of climate change

According to Moody's, European non-life insurers are becoming more vulnerable to the effects of climate change.

In 2023, Europe was hit by several major meteorological events such as floods, storms and forest fires. These have resulted in significant losses for insurance companies. This was compounded by tighter reinsurance market conditions. Most reinsurers have scaled back their exposure to natural catastrophe risk and raised their rates.

The rating agency also suggests that the best solution for insurers would be to reduce or suspend coverage for certain types of risk. This alternative could, however, lead to social pressure and possible intervention by government authorities.

To face these challenges and maintain profitability, the industry will have to explore new risk management and anticipation strategies, and revise its pricing policies.