Switzerland’s Insurance System Faces Rising Climate Risks Despite Strong Coverage
In Blatten, a recent incident saw over 90% of damages covered by insurance, despite the debris cone resting on uninsured land. This highlights the effectiveness of Switzerland's insurance system in managing climate-related damages.
The combination of mandatory cantonal building insurance and private coverage ensures that climate-related damages remain insurable in Switzerland. However, the Swiss Insurance Association, led by president Stefan Mäder, is concerned about the impact of rising temperatures on insurers.
Switzerland's average temperature has already risen to +2.9°C and could reach up to +4.9°C by the end of the century. Despite this, climate-related damages in Switzerland over the past decade have not shown a consistent increase in overall claims. Nevertheless, the insurance gap remains, with an average of 26% of natural disaster damages going uninsured, and up to 70% in some years.
Mäder and the Swiss Insurance Association have considered that if climate damage in Switzerland increases, insurers may need to adapt their risk models, raise premiums, or limit coverage to ensure insurability. They advocate for stronger climate adaptation measures and risk prevention. Globally, climate-related damages are rising steadily, but Mäder is confident that Switzerland's losses will remain insurable with adequate prevention measures. Major Swiss insurers operating abroad may need to adjust premiums or stop offering coverage in certain areas due to climate change.
Greater coordination between governments and insurers is essential to address climate change impacts on the insurance industry. While Switzerland's insurance system has proven robust, the increasing temperatures and potential changes in climate-related damages require vigilance and adaptation.
