The climate change that scientists have warned for years has become a crisis that we have witnessed much more closely today. Many disasters, from forest fires that could not be extinguished for days to giant storms that emerged at a time, have started to appear around the world in recent years. This ecological crisis has turned the risk models used by insurance companies to date. As a matter of fact, the insurance sector is dragged into a whole crisis.

The computable risk factor is the backbone of the insurance sector. Insurance companies have been providing services for years by calculating the possibilities of existing risks and determining the insurance premiums accordingly. However, the great disasters that become frequent due to climate change make it impossible to rely on these models because the disasters, which were seen as exceptional situations in the past century, are now experienced every few years. This leaves a table where they cannot calculate insurance companies and often have difficulty in meeting them.

Insurance companies stopped serving in certain parts of the USA

In the USA, the business has reached such a point that in some regions, even if they want home and business owners, they cannot insure their goods. The policy costs are still increasing in the regions where insurance services are still provided.

Florida is one of these regions. Many insurance companies stopped serving in Florida, where flood and hurricane disasters began to live very often. Some directly canceled the insurance policies, while the rest began to ask for very high premiums. When the private sector was withdrawn, the whole burden started to ride the public back. Citizens Property Insural, which serves under the state of Florida, is now responsible for 1.4 million policies today. Aware of this is not sustained, Florida is trying to direct people to the private sector, but the problem is that the private sector does not want these users.

Fires in California forced reinsurance companies

The last example of this was recently seen in the creatures in California. In one of the highest real estate value of the USA, the houses had been a ash, while the insurance companies had to watch a landscape where they thought about how to get up.

We know that this problem will not be limited to the United States because climate change affects the whole world. Moreover, insurance is already a global sector due to its nature. Because, when it comes to such great losses, reinsurance companies are involved. As the burden on reinsurance companies increases due to overlapping disasters, the guarantee power of these companies begins to weaken. At the end of the day, this makes the global insurance sector more fragrant.