Our newspaper's comment: Develop climate insurance and build a solid safety net to deal with climate risks
Recently, at a press conference held by the State Council Information Office on financial support for high-quality economic development, relevant persons in charge said that insurance institutions are fully committed to providing claim settlement services for major accidents and natural disasters such as heavy rains and typhoons to help disaster-stricken people and business entities overcome difficulties. In the first eight months of this year, the insurance industry has paid a total of 1.55 trillion yuan, a year-on-year increase of 26.1%.
Since the beginning of this year,"heavy rains in Guilin have turned into Venice","heavy rains in Changsha have rained on 54 West Lakes in one hour", and "floods have occurred in Lingyin Temple in Hangzhou". Heavy rains have occurred in various places one after another. At the same time, coastal areas are frequently harassed by typhoons. Hainan encountered the strongest typhoon "Capricorn" in history. Jiangsu, Zhejiang and Shanghai encountered two consecutive typhoons "Prasan" and "Beibijia" within a week. Global climate change is changing people's lives in a visible way. While we are working hard to reduce carbon emissions and mitigate climate change, adapting to climate change is also becoming a survival issue that people have to face. As an important tool to spread risks, insurance is an important means to improve the ability of the economy and society to resist risks. Developing climate insurance is an important measure for us to effectively respond to climate risks.
Today, many regions in our country have developed climate insurance for typhoons, floods and other related weather insurance based on regional characteristics. For example, Gusu District, Suzhou City, Jiangsu Province signed a contract with the People's Insurance Company of China to provide insurance coverage to approximately 745,000 citizens in the district. Growers in Shilian Town, Suichang County, Lishui City, Zhejiang Province and Suichang Branch of the People's Property and Casualty Insurance Company of China Limited have signed local financial subsidy natural disaster loss insurance for hybrid rice production (breeding) to increase security for hybrid rice seed production. Faced with the risks and challenges brought by climate change, climate insurance has served as an economic "shock absorber" and a social "stabilizer" to help enterprises and the public tide over difficulties.
We have also seen that climate insurance is still in the exploratory stage and there is still a lot of room for development. At present, climate insurance is mainly policy-based catastrophe insurance, and climate insurance for individuals and small and medium-sized enterprises is far from meeting market demand. For example, the new aquaculture typhoon index insurance plan in Fujian Province has recently been recognized by the majority of aquaculture fishermen. The signing work for 2024 was completed in just half a month. A total of 810 households were insured in the province, and a total of 66,100 acres of aquaculture typhoon index insurance have been provided, providing risk protection amount of 767 million yuan, a record high in eight years. It can be seen that the public has a need for climate insurance. It is believed that as the public becomes more aware and understanding of climate change, there will be greater market space for climate insurance. At the same time, current climate insurance is mainly available in coastal areas and other areas where typhoon weather occurs frequently, and there are few climate insurance products in the central and western regions. As the impact of climate change continues to intensify, more and more inland areas will be affected by extreme weather. Therefore, it is hoped that more regions can explore more climate insurance products for the public with different needs to choose from.
In fact, one of the important reasons why the number and types of climate insurance products are small is that insurance companies currently have insufficient grasp of relevant data. Insurance companies often need to rely on a large amount of data and modeling to measure risks and premiums. Measuring climate risks is very complex and requires various data such as my country's natural background data, climate data, urban construction and development data, public utilities data, and agricultural production data. At present, these data in my country belong to different departments, and the integrity and sharing of the data are seriously insufficient, which brings great challenges to climate insurance pricing and risk calculation, which further causes insurance companies to be discouraged from developing climate insurance. From this perspective, promoting the development of climate insurance requires the coordination of multiple departments and constantly breaking down barriers between data from various departments.
Munich Reinsurance and Swiss Reinsurance, two major global reinsurance giants, have recently released data on insurance losses caused by natural disasters in the first half of this year. Data shows that global natural disaster insurance losses in the first half of the year reached about US$60 billion, 62% higher than the average level of the past 10 years. It can be seen that global climate risks have become the sword of Damocles above our heads, and there is no way to avoid them. We must prepare for rainy days, vigorously promote the development of climate insurance, and build a solid safety net for enterprises and the public to deal with climate risks.
