Firms stare at record insured losses from changing weather

Unpredictable weather patterns could leave business owners underinsured; that is when the cost of a major loss exceeds the sum covered by the insurer.

Industry experts warned yesterday that unless climate risk policies are urgently put in place, policyholders and underwriters alike, risk exposure to abnormal weather-elicited losses.

“Nowhere is this more apparent than in sub-Saharan Africa, where countries will face some of the largest global exposure while having minimal capacity to respond. 

The most glaring challenge is the level of uninsured assets and livelihoods in these very vulnerable countries,” warned Al Hamdou Dorsouma, director of Climate change and Green Growth, African Development Bank (AfDB).

In a speech read on his behalf at the ongoing AIO Conference and Annual General Assembly in Nairobi, Dorsouma rallied calls sounded by executives running large corporations to introduce carbon pricing to provide the private sector with clarity and stability – if the sector is to survive the global warning.

“This calls for urgent and bold actions from all of us,” he noted.

Financial losses caused by adverse weather that did not seem material enough even a decade ago – must now be closely monitored and managed with weather-based financial instruments, according to National Treasury and Planning, Chief Administrative Secretary Erickson Simiyu.