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Wednesday 3rd December 2014
Action by the insurance industry is not sufficient on its own to protect buildings from damage arising from climate change, the Urban Land Institute has said.
The institute, an international not-for-profit research body, said the real estate industry and governments must work with insurers to reduce damage.
Its report What the Real Estate Industry Needs to Know about the Insurance Industry and Climate Change, concluded that accurately priced insurance alone cannot mitigate the effects of climate change on the built environment.
Investment in resilience infrastructure and reforms to development practices would also be necessary, it said.
Institute global chief executive Patrick L Phillips said: 'It remains a concerning issue that much of the world's most expensive and desirable real estate is built in locations that are vulnerable to the effects of climate change.'
Analysing data from Lloyds of London, the institute found in the past decade direct losses in real estate and infrastructure as a result of natural disasters has tripled, reaching $150bn per year.
Although insurers had given incentives for the adoption of building techniques that reduce these risks, 'the insurance industry's efforts alone are not enough to confront the extensive property damage wrought by climate change', the report said.
Governments and property developers had the last word on how projects were built and should collaborate with insurers, it urged.
The report includes case studies of flood insurance in Canada, Germany, the US and the UK.
Its report What the Real Estate Industry Needs to Know about the Insurance Industry and Climate Change, concluded that accurately priced insurance alone cannot mitigate the effects of climate change on the built environment.
Investment in resilience infrastructure and reforms to development practices would also be necessary, it said.
Institute global chief executive Patrick L Phillips said: 'It remains a concerning issue that much of the world's most expensive and desirable real estate is built in locations that are vulnerable to the effects of climate change.'
Analysing data from Lloyds of London, the institute found in the past decade direct losses in real estate and infrastructure as a result of natural disasters has tripled, reaching $150bn per year.
Although insurers had given incentives for the adoption of building techniques that reduce these risks, 'the insurance industry's efforts alone are not enough to confront the extensive property damage wrought by climate change', the report said.
Governments and property developers had the last word on how projects were built and should collaborate with insurers, it urged.
The report includes case studies of flood insurance in Canada, Germany, the US and the UK.
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