24 April 2023

• Only one-quarter of EU climate-related catastrophe losses currently insured; gap expected to widen as impact of climate change grows
• Insurance gap poses risks to economy and financial stability
• ECB and EIOPA outline policy options to promote climate catastrophe insurance

The European Central Bank (ECB) and the European Insurance and Occupational Pensions Authority (EIOPA) today published a joint discussion paper on how to better insure households and businesses in the European Union against climate-related natural catastrophes such as floods or wildfires. The policy options set out in the paper are aimed at boosting the uptake and efficiency of climate catastrophe insurance while creating incentives to adapt to and reduce climate risks.

“We need to increase the uptake of climate catastrophe insurance to limit the growing impact of natural disasters on the economy and the financial system,” said ECB Vice-President Luis de Guindos. “However, to reduce losses in the…