Your browser does not support JavaScript!

Climate change insurance: addressing financing challenges and moral hazard, respective roles of public/private sectors

Day 1 Afternoon

Wednesday 13 September

Room :



Public Authorities
Dean Cameron
President - National Association of Insurance Commissioners (NAIC)
Petra Hielkema
Chairperson - European Insurance and Occupational Pensions Authority (EIOPA)
Romain Paserot
Deputy Secretary General - International Association of Insurance Supervisors (IAIS)
Eva Wimmer
Director General - Federal Ministry of Finance, Germany
Industry Representatives
Sonia Barriere
Head of Strategic Transformation & Member of the Executive Committee - CNP Assurances
Patricia Plas
Public Affairs Director - AXA Group
Claire Souch
Vice President Global Models & Climate Risk, Moody's RMS - Moody's Analytics
Other stakeholder & expert
Jean-Jacques Bonnaud

Context and objectives of the session

Climate change insurance has become essential in the face of increasingly frequent and severe climate-related disasters. Insurers face mounting challenges in accurately pricing premiums and assessing risks due to the unpredictable nature of extreme weather events.
Recent floods in Germany, causing 35 billion euros in damages in 2021, illustrate the rising costs insurers are dealing with. Projections estimate potential damages of up to 900 billion euros in Germany by 2050, demanding immediate action. Similar situations are observed globally, with the US experiencing over $800 billion in damages from 119 climate disasters from 2010 to 2019, including severe wildfires.

Developing countries face an insurance gap for transitioning to low-carbon energy sources while preserving economic development. Moral hazard, where insurance coverage leads to complacency in risk prevention, is a significant concern.
Fair treatment of customers, risk analysis, and market conditions are crucial in climate change insurance. Governments play a vital role in regulation, risk assessment, and adaptation measures, including mandatory coverage and financial support for vulnerable communities.

Just Energy Transition Plans (JETP) are important for emerging countries, clarifying private sector involvement in carbon-intensive activities. Insurance companies must engage in risk modeling, data sharing, and promoting climate-friendly practices. However, balancing risk management with financial sustainability remains a challenge.
Collaborative efforts between public and private sectors are necessary to create a robust climate change insurance ecosystem that fosters resilience. This session explores these challenges, moral hazard, and the need for a balanced approach between public and private sectors, emphasizing policy initiatives as a way forward.

Questions to be addressed.

  1. What is the evolution of the physical risk stemming from extreme events and loss of biodiversity and the consequences on the insurability of nature related risk?
  2. What should be the role of insurance undertakings to address the physical climate risks associated with extreme weather events which are increasing due to climate change and are a significant threat to societal resilience?
  3. What are solutions beyond insurance mitigate the risk and address the costs of climate risk? What can we learn on existing close collaboration between public and the insurance sectors in the EU? What are the priorities to further develop such cooperation?