Europe is struggling with extreme weather. In Central Europe, floods are causing devastation. Their intensity is almost unheard of for this time of year. Across Poland, Austria, Romania, Hungary, and Czechia, the authorities have been forced to draft in volunteers and even members of the armed forces to help strengthen flood defenses. Already, the floods have taken the lives of 23 people. In Portugal, meanwhile, wildfires rage. Seven are dead, homes have been flattened, and swaths of land have been burned. These events share a cause: the climate crisis.
See also: Climate and Catastrophe Risk Strategies
The events in Europe are a tragic reminder of why, with Climate Week NYC just completed, and COP29 within sight, it’s no longer acceptable to respond to climate change with commitments to act. The last few years have furnished us with plenty of pledges and promises, agreements and assurances. But not enough has changed. So although a place exists for statements about what will be done, our attention must now be on what is being done. Action is the order of the day. At the country, company, and individual levels, we need to talk less and do more.
No one sector can solve the problem by itself, but each can play its part – and set an example for others. Insurance is doing this. As a sector that plays an important social role, insurance must. It has long mitigated the financial impact of events such as illness, accidents, and disasters, undergirding economic activity by allowing people and businesses to take calculated risks and providing long-term security to organizations and individuals so they can plan ahead.
Faced with one of the greatest challenges to long-term societal stability, insurance has turned to cutting-edge technology, thanks to which providers can now, with an enormous degree of accuracy and at breathtaking speed, monitor and to some extent mitigate climate events. Climate intelligence firms are using artificial intelligence and geoanalytics to transform raw satellite imagery into usable information. That means, in practice, processing the pictures taken by public and private satellites orbiting the planet and then visualizing them. Insurers are forming partnerships with firms like these and incorporating their technology into platforms. Because of this, they can shift from responding to disasters to predicting and preventing them. It’s a fundamental change: Insurance, traditionally, focused on helping people recover after an event; it can now help prevent those events from happening.
See also: How AI Can Help Insurers on Climate
The response side shouldn’t be overlooked, however. Technology is transforming that, too. With Earth observation (E.O.) data – satellite data made usable by technology companies – insurers can precisely monitor the extent of a flood, wildfire, or other disaster as well as the damage it has caused. That streamlines the claims process and reduces the emotional toll on all involved. Even as it shifts its focus from response to prevention, insurance hasn’t neglected the importance of rebuilding after disasters, or of the reality that some disasters can’t be prevented. It’s become better at responding, too.
But the focus of insurers remains prevention, and that’s because, as the Dutch philosopher Erasmus put it, "prevention is better than cure." Through the use of geospatial data from E.O. technology, insurers can now help clients around the world mitigate risk. Agents can explain why properties are at risk and how to reduce those risks. Clients are given access to a virtual pharmacy – a kind of large medicine cabinet, containing software and services, supplied by third parties, that can reduce their risk of harm. They can visualize data on fires, floods, and other natural hazards in close to real time. They can even be warned via a push notification if a natural disaster is imminent or likely so they can protect themselves, their families and their assets.
A sea change is underway, propelled by the reality of the climate and other overlapping crises, the availability of state-of-the-art environmental intelligence technology, and the boldness and readiness of insurers to walk forward into the future. The gravity of the challenges we face as a planet notwithstanding, it’s an exciting time to be working in the insurance sector. Because at a time of global volatility, insurers are stepping up, rising to the full height that their social role demands.
