On the benefits of insurance and disaster risk management integration for improved climate-related natural catastrophe resilience

Insurance serves modern society and commerce by pooling risk to reduce the economic impact of disasters. Concurrently, Disaster Risk Management (DRM) scientists, responders and policymakers are co-developing proactive resilience and mitigation strategies with European citizens against accelerating climate-related natural catastrophes. The increasing frequency and severity of natural catastrophes exacerbates the insurance coverage gap by incurring even greater losses for (re)insurers, leading to higher premiums in exchange for cover or the withdrawal of services entirely. This paper presents a conceptual framework for cross-sectoral collaboration between the insurance and DRM communities towards open, transparent and optimised disaster risk management for all EU citizens and businesses. Furthermore, this research identifies key enabling technologies (satellite, drone, artificial intelligence, blockchain) and novel risk transfer mechanisms with the potential to accelerate societal resilience to climate disasters through effective risk management. The study emphasises the critical role of the insurance industry in effective DRM and highlights where insurers could take a more active role across the temporal plane of a natural disaster by engaging in ex-ante interventions to protect those vulnerable to climate change-related risk.