23 January 2025: Climate change could cost Ireland’s insurance industry up to €1.5 billion over the next decade, a Deloitte survey shows.
The survey of 115 of Ireland’s leading insurance experts found that 38% put the cost of dealing with the impact of extreme events, such as flooding or storms, at €1 billion to €1.5 billion while 34% said it would be more than €1.5 billion.
The survey was conducted at a Home and Motor Insurance Seminar, hosted by Deloitte, to discuss some of the biggest issues affecting the insurance sector, including extreme weather trends, climate adaptation, regulatory updates, and digital transformation. It included representatives from across the industry and a range of companies including Allianz, Axa, FBD, RedCLick and Zurich.
The survey also found that a majority of respondents (76%) believe the Government should invest in national and local flood defences as a key initiative to address the increasing prevalence of extreme weather events. This was chosen ahead of acting as a reinsurer of last resort (17%) and providing subsidies or financial support for climate adoption measures (7%).
Other key findings included:
Speaking at the Home and Motor Insurance Seminar, Noel Garvey, Actuary and Partner in Audit & Assurance at Deloitte, stressed the significance of industry-specific preparation to address climate change challenges:
As a society, we all have to understand that prevention goes hand-in-hand with mitigation. The insurance sector needs to ensure it is equipped with the latest data and insights to evaluate and manage risks effectively. From the increased frequency of flooding to the risks posed by changing weather patterns, now is the time to stay one step ahead wherever possible, to prepare us all for new and emerging future weather-related risks.
While the survey of insurance experts at our event is a snapshot of the challenges the insurance sector is experiencing, it has fascinating insights including more than a third (38%) thinking the cost of climate change for insurers will run from between €1 billion to €1.5 billion, with a further 34% expecting costs of over €1.5 billion euro and potentially as much as €5 billion euro.
“When uninsured losses are included in the overall cost of damage to infrastructure, property, agriculture and human health the total economic losses from extreme weather-related events will be substantially higher than these estimates.”
Garvey also highlighted the role of Ireland’s Programme for Government in driving climate resilience:
The Programme for Government lays out clear and credible plans for climate adaptation, backed by initiatives like the National Adaptation Framework and the Climate Action Plan. However, what matters now is delivery. We are encouraged to see insurers engaging in a future-focused and active way to align their strategies with national goals.
A key theme of the event was the importance of data-driven, decision-making, particularly in flood and weather forecasting systems.
Keith Lambkin, Head of Climate Services at Met Éireann, highlighted the increasingly important role of standardised climate projections when it comes to national infrastructure planning:
The Translate project is focused on standardising national climate projections, which will make it a crucial tool for decision makers in all sectors, whether agriculture, finance, or housing. The consistent and standardised data will mean we can all make smarter and more informed decisions. It makes sense for insurers, governments, and private sectors to work from the same baseline to accurately assess and manage risks going forward.
Lambkin said smarter infrastructure decisions must run in parallel.
In sectors like road building, for example, integrating climate projections ensures drainage systems can handle future rainfall intensity. Similarly, for housing, we can adapt building standards to make properties more resilient to extreme weather. It’s about reducing exposure through forward-looking planning and collaboration.
The event also explored advances in flood forecasting with Rosemarie Lawlor, Met Éireann’s Chief Hydrometeorologist describing how meteorological and hydrological data is being integrated to provide flood forecasts and guide local authority responses:
The Flood Forecasting centre at Met Éireann is the first step of a whole government approach to managing flood risk, in view of the increasing frequency and intensity of weather events caused by climate change. In collaboration with other state partners, we are providing these forecasts and other related guidance to emergency responders and local authorities to enable an information-driven approach to managing potential flood events.
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