Page 19 - Insurance Times July 2024

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An uninsurable future? cating an insurance protection gap of The transaction is valued at 600 million
57 per cent and 69 per cent respec- USD, with a possible earn-out payment.
Insurers and reinsurers in Dubai are
tively.
expected to bleed in the aftermath of The acquisition includes the entire
the recent floods. Could they have pre- A geographical breakdown of these Travel Guard portfolio (excluding Japan
dicted and priced this risk? That is only numbers shows the divide between the and India). Travel coverage provided
one part of the challenge insurers are developed and the developing worlds; by AIG's Accident & Health business is
facing; the other part is about places the insured and the insurance losses not part of the agreement.
already becoming uninsurable under are mostly in the developed world The acquired activities will be com-
heightened climate risks. while those in the developing world bined with those of Cover-More Group,
are largely uninsured and thereby ex-
In 2015, the then chairman and CEO an Australian provider of travel insur-
of AXA Group stated that most assets tremely vulnerable to climate change ance solutions and a member of Zurich
and (natural) disasters. In 2023, of the
would be uninsurable if global warm- Insurance. Pending regulatory ap-
ing rose 4°C. In 2018, the current CEO estimated $114 billion losses reported proval, the transaction is expected to
of AXA SA said that basement shops in in the US, insurance protection gap be finalized by the end of 2024.
New York or Mumbai will not be insur- was only 30 per cent.
able with 3-4 degrees warming. In the Asia-Pacific, that gap stood at China Taiping Insurance
91 per cent of the $65 billion reported
The world is quickly finding out that it opens a non-life subsid-
may not take even that to make places losses. The estimated losses in India in
2023 stood at close to $6 billion, made iary in Luxembourg
uninsurable. Global average surface
temperature rose 1.45oC in 2023, the up mostly of crops, houses, and ani- China Taiping Insurance is entering the
warmest recorded year, according to mals; however, very little of that was European insurance market with the
the World Meteorological Organiza- protected through insurance. India establishment of a non-life subsidiary in
tion. And it is wrecking lives, property, also lost a great number of human Luxembourg.
lives.
and insurance companies. Named China Taiping Insurance (LU)
According to Climate and Catastrophe Zurich Insurance to ac- "CTIL", the new entity received ap-

Insight reports by Aon, a risk advisory quire AIG's travel insur- proval from the Commissariat aux As-
firm, global economic losses from cli- surances to begin operations in the
mate and catastrophe events are in- ance and assistance busi- country on 31 May 2024.
creasing. Reported losses for 2022 and ness As the Chinese group's only subsidiary in
2023 stand at $355 billion and $380 Zurich Insurance has signed a defini- the European Union, CTIL offers a wide
billion, respectively. tive agreement with American Inter- range of non-life products in Luxem-
More importantly, only $151 billion and national Group (AIG) to acquire its bourg, Belgium and the Netherlands.
$118 billion respectively in 2022 and personal travel insurance and assis- The company intends to gradually ex-
2023 were covered by insurance, indi- tance business. pand into other European countries.

18 July 2024 The Insurance Times