Responsible Insurer

Between climate change and human intervention

Over 75% of the earth’s land is in a state of extreme deterioration

The study “Unprecedented climate events: Historical changes, aspirational targets, and national commitments”, conducted by a team of US researchers, claims that we will have to get used to the growing frequency of extreme meteorological events, due to climate changes. According to experts, heat waves could quadruple their frequency in 50% of Europe and in 25% of Asia over the coming years, while the likelihood of torrential rains will become three times greater compared to today in 35% of North America and East Asia.

Natural disasters are rising sharply, bringing with them a spike in financial losses, whose impact is already considerable today, making the battle against climate change a priority. In 2008, the EU adopted a strategy to reduce greenhouse gases by 20% on 1990. The goal had already been achieved by 2015, and the latest predictions speak of a 26% reduction in 2020, although critical situations continue. In London, for example, about 9,000 people die every year from causes related to air pollution. The English capital is by no means an exception. In fact, 95% of the world population breathes in polluted air, which means increased risk of stroke, heart attack, lung diseases and tumours, with effects that impact most on poorer communities.

A report by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) claims that between climate changes and human intervention, over 75% of the earth’s land is in a state of extreme deterioration. Without corrective measures, the percentage of the deteriorated land will reach 95% in 2050, forcing a few million people to migrate due to the collapse of food production and water shortages.

The land is a non-renewable source that is consumed by human activities: new buildings, industrial sheds and settlements, industrial sites, roads, deforestation, ports and railways, are all natural pieces of land that are irreversibly transformed. Inevitably, the process has followed the growth pace of the various economies and the increase in land consumption has become a global phenomenon. In Europe alone, over 19 million hectares of land have disappeared which, to give an idea, is equal to twice the size of Hungary.

Land, in its natural state, is able to provide man with the tools necessary for survival: supply services (food products and biomass, raw materials etc.); control services (climate control, carbon capture and storage, erosion and nutrient erosion control, water quality control, protection against and mitigation of extreme hydrologic phenomena etc.); support services (physical support, decomposition and mineralisation of organic material, species’ habitats, biodiversity etc.) and cultural services (recreation, landscape, natural heritage etc.)

Apart from the basic major causes, poor attention to incorrect agricultural, animal farming and forestry practices is clear, not to mention aggressive development, overbuilding, changes in use and the local effects of environmental changes that give rise to deterioration, which gradually limits the functions of the land. It is clear that climate change, air pollution and land consumption affect people all over the world.

Insurance is based on risks, and climate changes heavily affect its business. The impact of the natural disasters that have afflicted the planet over the past twenty years has hit over 5.4 billion people, claimed over 1.7 million victims and 2.9 trillion dollars in damage (2017 was a record-breaking year with 330 billion dollars damage).

With an increase in the frequency and intensity of natural events, as is expected over the years ahead, economic damage will also rise. In turn, insurance companies will be called upon to quantify increasingly unpredictable and complicated risks, but will also be able to rely on technological innovation and all its related opportunities.

According to various studies (for example that by the University of California – Davis entitled “Social protection in the face of climate change: targeting principles and financing mechanisms”), insurance is the most effective tool for increasing the resilience of poor families against climate changes, while at the same time preventing other family units from slipping into poverty.

Generali undertakes to support and promote high added-value social and environmental solutions. To find out more, visit the section insurance products with social and environmental value.