The wildfires have scorched Australia’s insurance industry as costly climate change-related disasters grow more frequent
Australia may have beaten the blazing wildfires earlier this year, but the aftermath still haunts its economy. According to insurers, climate change-related disasters have cost them more than $5 billion in 2020.
The costs of fires and other disasters linked to climate change is expected to rise, according to the second edition of Insurance Australia Group’s (IAG) “Severe Weather in a Changing Climate.”
Mark Leplastrier, IAG’s executive manager, claims that a mere four climate catastrophes have cost insurance companies across the continent a staggering $5.4 billion. These events include the bushfires, the hail storms in Canberra and the Sunshine Coast, and February’s east coast low cyclone. The bushfires on their own are believed to have total claims rising up to $2.3 billion.
Leplastrier notes that a large portion of this damage could have been spared had there not been residential areas and other buildings in fire prone regions.
“There’s not a mechanism to actually stop or prohibit buildings like there is in flood,” he told The Sydney Morning Herald. “Those are some of the tougher decisions we’re going to have to make as a broader approach.”
Australia’s climate woes don’t end here. According to scientists, hail storms are on the rise throughout the island. In addition, floods are believed to be on the rise due to the atmosphere holding 7% more moisture for each degree of warming, the Herald reported.