Two data points reinforce the big lesson from 2023: The impact and cost of climate change is becoming hard to ignore.
Insurance
Climate change impacts insurance markets as it increases the frequency and severity of extreme weather events like floods, hurricanes, and wildfires. These events lead to higher claims and payouts, affecting the profitability and risk models of insurance companies. Insurers must adjust premiums and coverage to reflect these increased risks, impacting affordability for customers. Climate change drives the need for new insurance products and strategies to manage evolving risks in coverage sectors.
Real Estate and Climate Risk
Real estate sits at the heart of the American economy. It also faces rising risk from flooding and wildfires alters the economics of real estate in some regions. As climate change advances, analysts say it is likely to drive shifts in the valuation of properties, as well as the cost to insure them.
Thunderstorms Are Changing Climate Risk
Bigger, wetter thunderstorms are one of the manifestations of climate change, and are altering risk calculations for millions of American homes and businesses. The good news: Satellite imagery and AI can improve alerts of impending floods, as well as insurance options for at-risk properties.