Climate-related risks are putting increasing pressure on the availability and affordability of insurance across Europe. Historically, only around a quarter of natural catastrophe losses in the EU have been insured. A substantial share of the financial consequences therefore continues to fall on households, businesses and public authorities.<\/p>\n\n\n\n
Against this backdrop, the European Commission presented its EU Framework for Climate Resilience on 27 October 2026, including the establishment of a Climate Insurance Alliance.<\/p>\n\n\n\n
The initiative aims to bring together insurers, reinsurers, insurance intermediaries, policyholders, risk-modelling experts, investors, EIOPA and public authorities to develop solutions addressing Europe’s natural catastrophe insurance protection gap.<\/p>\n\n\n\n
For insurance brokers and risk advisers, the initiative is particularly relevant. It recognises that improving insurance protection requires more than additional insurance capacity: effective risk prevention, reliable information, appropriate advice and sustainable risk-sharing arrangements are equally essential.<\/p>\n\n\n\n
The Alliance is expected to develop its first concrete measures by the end of 2027, focusing on three complementary priorities.<\/p>\n\n\n\n
The first priority is to increase insurance uptake by addressing barriers relating to the availability, affordability and adequacy of coverage.<\/p>\n\n\n\n
This includes improving policyholders’ understanding of natural catastrophe risks and insurance conditions, particularly exclusions and deductibles, as well as exploring alternative solutions such as parametric insurance.<\/p>\n\n\n\n
Insurance cannot provide a sustainable response to increasing climate risks without greater investment in prevention and adaptation.<\/p>\n\n\n\n
The Alliance will therefore examine how insurance mechanisms can encourage preventive measures, including through risk-based incentives. Improved risk modelling and opportunities for data sharing should also support more informed risk assessments.<\/p>\n\n\n\n
As climate-related losses increase, the continued insurability of certain risks may become more challenging.<\/p>\n\n\n\n
The Alliance will explore ways to strengthen risk-transfer capacity, including through reinsurance, catastrophe bonds and other financial mechanisms.<\/p>\n\n\n\n
Public-private partnerships will also form part of these discussions, recognising that certain risks may require arrangements combining private insurance capacity with public intervention. This dimension is particularly relevant to ongoing Belgian discussions on natural catastrophe insurance, including the potential development of more sustainable public-private risk-sharing mechanisms.<\/p>\n\n\n\n
The explicit inclusion of insurance intermediaries in the Alliance recognises their role in connecting risk assessment, prevention and insurance solutions.<\/p>\n\n\n\n
Insurance brokers and risk advisers have direct insight into both their clients’ risk exposures and the practical functioning of insurance markets. They are therefore well placed to identify emerging vulnerabilities, recommend preventive measures and assess appropriate risk-transfer solutions.<\/p>\n\n\n\n
They also experience first-hand the consequences of changing market conditions, including reduced insurance capacity, premium increases, coverage restrictions and evolving exclusions.<\/p>\n\n\n\n
Their contribution is important to ensure that proposed solutions respond not only to insurance market constraints but also to the practical needs of policyholders.<\/p>\n\n\n\n
One area requiring particular attention concerns the Alliance’s intention to improve the presentation of natural catastrophe exclusions and deductibles in pre-contractual information.<\/p>\n\n\n\n
Although no new obligations for insurance intermediaries are proposed at this stage, future measures could interact with existing information requirements under the Insurance Product Information Document (IPID) and advisory obligations under the Insurance Distribution Directive (IDD).<\/p>\n\n\n\n
Any new measures should therefore focus on improving customer understanding without introducing unnecessary complexity or duplicating existing requirements.<\/p>\n\n\n\n
Alongside the Alliance, the Commission intends to strengthen the information available on climate risks and insurance protection.<\/p>\n\n\n\n
Two initiatives are particularly relevant:<\/p>\n\n\n\n
For insurance brokers and risk advisers, improved access to reliable and sufficiently granular risk information could support more accurate exposure assessments, more targeted prevention advice and earlier identification of potential insurability challenges.<\/p>\n\n\n\n
The broader implications of climate change also extend beyond property and natural catastrophe insurance.<\/p>\n\n\n\n