Why Climate Resiliency Should Be a Shared Priority

The number of record-breaking statistics related to natural disasters in recent years is eye-opening to the impact of climate change and the urgent need for the U.S. to invest in stronger mitigation, adaptation, and resilience efforts.

In 2023, between January and August, the U.S. experienced a record-breaking 23 separate weather and climate disasters each with losses exceeding $1 billion — surpassing the previous record of 22 separate billion-dollar or more natural disasters seen in all of 2020. With natural disaster losses mounting and millions of people increasingly at risk, we must take action as individuals, communities and across all levels of government to manage the impacts of more severe weather and, in turn, save lives.

Last year, Hurricane Ian became the second-costliest insured loss event ever on record globally, second only to Hurricane Katrina. While Hurricane Ian caused extreme destruction, there were also shining examples of resiliency.

Communities and homes that were built according to the latest building codes suffered far less damage. For example, Babcock Ranch, a master planned solar community in Florida where storm safety and climate resiliency has been factored into every element of design, emerged from Hurricane Ian practically unscathed and with no loss of power, internet, or water.

As the planet’s continued warming trend increases the severity of hurricanes, the projections for the future are grim. And it’s not just hurricanes. Research shows that the changing climate has also led to longer and more-active wildfire seasons. Insurers are also seeing a concerning increase in the volume of smaller to mid-size natural disasters, like severe storms, tornadoes, snow and ice storms, and flooding.

These events are becoming more impactful and generating an increasingly large volume of insured losses and devastating communities across the country.

Natural disaster losses from 2020-2022 in the US exceeded $275 billion in 2022 dollars, which is the highest ever three-year total for U.S. insurers. Population, housing, and business growth in hazard-prone areas are exacerbating the effects of climate change by leading to more frequent and severe catastrophe losses.

Insurers are proactively engaged in efforts to address long-term weather losses from the changing climate and are in a unique position to help policyholders, businesses, and governments understand and address the risks they face.

Insurers continue to invest in and support the development of sophisticated tools and technology to improve the mapping and modeling of climate risks and natural disasters. Insurers also invest in building safety research through the Insurance Institute for Business & Home Safety to help develop real-world, actionable solutions for consumers and communities.

Consumers play a critical role in helping to limit damage and protect their community by strengthening their homes, such as upgrading roofs and windows, to meet stronger construction standards. Yet, according to a recent APCIA/Harris Poll, nearly three-quarters of U.S. homeowners say they face barriers to increasing the resiliency of their home, with the top barrier being that it is too expensive. Of those polled, the most helpful incentives to overcome concerns are reduced costs for updated materials through sales or income tax credits, or rebates and discounts on insurance premiums. Many insurers already offer discounts for certain mitigation measures. Policymakers can help by prioritizing funding for resiliency initiatives and programs to help homeowners and communities better withstand natural disasters, including stronger and strictly enforced building codes.

Property-casualty insurers have been long-time leaders in addressing the impacts of climate change by advocating for stronger mitigation and adaptation efforts and building codes. The research is clear that investing in adaptation can reduce the cost of disaster response and maintain property values and tax structures, and most importantly, support community safety. According to the National Institute of Building Science, adopting the latest building code requirements saves $11 per $1 invested.

Analyzing, preparing for, and responding to risk is at the heart of what P/C insurers do every day. As climate change continues to amplify the risk of disaster, insurers remain committed to using our unique expertise to help keep families and communities safe. Risk mitigation must continue to be a shared priority and we must work together to adapt and increase resiliency in the face of climate-fueled disasters.