Värdering av klimatrisk inom försäkringsbranschen - En kvalitativ studie om värdering av klimatrisker och implikationer av klimatförändringar för försäkringsbolag i Sverige

Abstract

Global costs due to natural disasters have increased by staggering proportions over recent years. Rising temperatures and increased precipitation contribute to more extreme weather events where climate-related damage is becoming more common. The increased exposure to climate-related risks generates increased pressure on both individual insurance companies and on the insurance system as a whole. This study aims to create a better understanding of how insurance companies in Sweden manage and assess risks that arise in connection with climate change and how they are integrated into insurance decisions. To answer the study’s purpose an abductive and qualitative approach with semi-structured interviews were conducted. The interviews were conducted with respondents, holding relevant positions in the insurance industry. Information provided in interviews has been analyzed using a theoretical framework, mainly based on theory of insurance, risk management and institutional theory. The result shows that climate risk assessment is a complex issue where several factors are involved. The insurance market is characterized by fierce competition where a properly valued price is of utmost importance. Furthermore, the Swedish insurance market is currently relatively spared from the effects of climate change. When pricing, climate risks are valued based on long time series of historical data. However, due to the complex nature of climate change, a lack of data can make it difficult to determine whether individual events are an increase in natural disasters or extreme statistical observations. Insurance companies have the opportunity to integrate increased climate risk into insurance through higher insurance premiums. Traditionally, insurance is renegotiated annually, which is considered an advantage. Risk is also transferred to reinsurance companies, which reduces the vulnerability of individual natural disasters. An increased frequency of climate-related events risks reducing profitability as a result of increased claims payments and higher reinsurance prices and is something that should be taken into account. In the future, climate risks are perceived to be more tangible for the insurance industry in Sweden. However, due to the complex nature of climate change, it is difficult for insurance companies to take into account future costs today. Instead, the importance of climate adaptation measures is highlighted, for example, through investment in research, education and preventive measures.