We invite you to read the publication of Diario Financiero in which our director of the Civil Litigation and Arbitration Group, Francisco Fuentes, commented on the boom in coverage against natural disasters.
Environmental catastrophes are becoming more frequent due to the advance of climate change and, in this scenario, people and companies have become aware of the importance of having policies that insure their assets, which is impacting the industry.
The consequences of climate change have been felt in various industries and the insurance market is no exception, since the increase in extreme events has generated a dynamism in the industry, with greater requests for coverage linked to the consequences that these may have.
The global market for insurance linked to natural disasters is experiencing an expansion. According to the report ‘Global Catastrophe Insurance Market by Type: Forecast 2024-2030’, this segment is expected to continue growing at a compound annual rate of 4.39%, reaching US$ 211.6 billion in 2030.
The climate crisis represents ‘an important and increasingly permanent challenge for insurers, especially in view of the increase in weather phenomena such as floods, fires or earthquakes that need to be insured’, recognizes the firm HDI Seguros, which incorporates this type of coverage in home and SME policies.
In Chile, the experiences left by events such as the 2010 earthquake, the forest fires and the strong storms of this year, have been generating a growing demand for this type of insurance, assures the country manager of Crawford Chile, Fernando Varas, who specifies that, although historically in this seismic country there was already a good culture of insuring property against natural events, as a consequence of collectively contracted mortgage portfolios, today this need ‘has also extended to the private contracting of this type of coverage, not only for the protection of buildings, but also of their contents’.
This is because people and companies have learned over time that the damages caused by these events ‘are catastrophic’ in terms of assets and unbalance finances, truncate projects and also ‘temporarily slow down the economy, and this obviously leads to impoverishment‘, says the director of litigation and arbitration of Albagli Zaliasnik (az), Francisco Fuentes.
In his opinion, the boom in the contracting of this type of insurance also responds, therefore, to an awareness that one way of mitigating the damage caused by disasters is by transferring this risk to the insurance company that assumes it, which in turn generally transfers the risk to the capital market.
An example of this dynamism in the market can be seen in the offer of Mutual de Seguros de Chile, which has free benefits for its policyholders, focused on the protection of homes in the event of fires, floods and other types of natural disasters. These last three years we have seen a significant increase in the demand for this benefit, which was reduced during the pandemic period’, assures the commercial manager of the entity, León Peralta, and emphasizes that so far in 2024 the demand has grown by 284% compared to December 2023.
Source: Diario Financiero, November 04, 2024.
