The industry may well be at a tipping point where its role begins to shift

By Jon Guy 

The UK has been put on flood alert as events on the other side of the planet are set to have a significant impact on our climate and sea levels.

Jon Guy

Jon Guy

The latest study by the British Antarctic Survey, published yesterday (9 August 2023), has warned that extreme climate events in Antarctica, such as ocean heatwaves and ice loss, will almost certainly become more common and more severe, with the likelihood that it will drive higher flooding and heatwave risks for the northern hemisphere, including the UK.

The scientists say drastic action is needed to limit global warming to the Paris Agreement target of 1.5°C and warned recent extremes in Antarctica may be the tip of the iceberg – forgive the pun.

Lead author Martin Siegert, from the University of Exeter, said: “Antarctic change has global implications.

“Reducing greenhouse gas emissions to net zero is our best hope of preserving Antarctica and this must matter to every country – and individual – on the planet.”

Siegert said the rapid changes now happening in Antarctica could place many countries in breach of a key international treaty.

“Signatories to the Antarctic Treaty (including the UK, USA, India and China) pledge to preserve the environment of this remote and fragile place,” he said.

“Nations must understand that by continuing to explore, extract and burn fossil fuels anywhere in the world, the environment of Antarctica will become ever more affected in ways inconsistent with their pledge.”

Increased risks

Coauthor Anna Hogg, from the University of Leeds, added: “Our results show that while extreme events are known to impact the globe through heavy rainfall and flooding, heatwaves and wildfires, such as those seen in Europe this summer, they also impact the remote polar regions.”

What it means for the UK is that insurers are likely to face increased risks from flooding and extreme heat – with the associated threats they pose. There is also an ancillary concern that extreme rainfall, coupled with a period of high temperatures, may create a subsidence crisis as ground conditions become more dynamic.

The problems insurers, brokers and their clients face from the impact of extreme climate event are set to increase and questions remain over when  these risks reach a scale or severity when they become almost uninsurable, given the reinsurance markets are already retreating from certain natural catastrophe risks.

The industry may well be at a tipping point where its role begins to shift from calculating and pricing the costs of restitution and repair in the case of the unforeseen, to one of calculating the required resilience before cover can be contemplated for very much forseen risks.