Global insured losses to catastrophe losses rising 5-7% annually have compelled Spanish insurer MAPFRE to urge greater public-private cooperation to confront climate losses.
MAPFRE has written a COP30 report urging governments and the insurance industry to step up efforts to work together to curb the effects of climate change, as extreme weather continues to increase insured losses.
The Madrid-based international insurer observed that insured losses are rising at a rate of between 5-7% each year, with fires, droughts, heatwaves, and flooding now accounting for the greatest economic and social damage worldwide.
The paper “Climate Change: Extraordinary Risks and Public Policies”, was released by MAPFRE Economics at the COP30 summit in Brazil.
The report highlights widening global insurance protection gaps, with Asia Pacific leading the way in its lack of insurance protection against climate risk perils.
Asia faces the largest shortfall, with 82.8% of natural disaster losses uninsured; Latin America follows with an 81% gap. By contrast, North America has the lowest gap at 43.2%, despite rising exposure to cyclones, winter storms, and wildfires, MAPFRE noted.
These disparities stem from low insurance penetration in emerging markets, population growth in high-risk zones, and the increasing frequency of extreme events, the insurer said.
MAPFRE emphasised that so-called secondary perils, sometimes called frequency perils, such as wildfires, heatwaves, floods, and storms, account for more than half of all disaster losses, driven in part by global warming.
In 2024, climate-related catastrophes caused more than $300bn of economic losses for the ninth consecutive year, MAPFRE noted, of which approximately $145bn was insured.
“Catastrophic insured losses have grown consistently for decades,” said Ricardo González, director of analysis, sectorial research and regulation at MAPFRE Economics.
“Climate change is a driver, but so are economic growth and increased development in vulnerable areas,” he said.
He noted that Europe, now the world’s fastest-warming continent, saw a record number of natural disasters in 2023.
MAPFRE’s report stresses that reducing the nat cat insurance gap requires coordinated action between insurers and public authorities.
Without stronger risk-management and compensation mechanisms, some climate-related risks may become uninsurable.
The report calls for stronger public-private collaboration, citing models such as Spain’s Insurance Compensation Consortium, as well as expanded use of prevention tools - early-warning systems, risk-reduction incentives, and parametric insurance structures.
MAPFRE stressed it is advancing solutions that support decarbonisation and climate adaptation, including coverage for renewable energy, electric mobility, and regenerative agriculture.
Initiatives highlighted at COP30 include the company’s investment in Blue Marble’s parametric insurance solutions, the development of catastrophe bonds, the MAPFRE Renewable Energy II Fund focused on biomethane, and Bioseguro, a new programme supporting post-disaster reforestation and natural regeneration while generating carbon credits.
Mónica Zuleta, MAPFRE’s group head of sustainability, repeated MAPFRE’s policy to becoming carbon-neutral across its own operations by 2030 and to reach net-zero emissions in its insurance and investment portfolios by 2050.
“Climate change is one of the greatest challenges to global stability and to the insurance industry itself,” said Zuleta (pictured).
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