Storms and floods are costly – insurance industry reflects on the weather risks of climate change

For example, Lähi-Tapiola paid out a record amount of compensation for the storms and floods that hit south-west Finland last year. The industry is closely monitoring the effects of climate change.

Storm Lyly in early November roared off Rauma with hurricane force winds, causing widespread destruction on the mainland.

The lyly felled at least a thousand cubic metres of forest from Ari Mäkitalo.

– I have not yet received a decision on compensation for the damage, but I’m sure there will be one, since it was a storm,” says Mäkitalo.

He says he has a little concern that he has been thinking about the financial impact of climate change and the weather phenomena it causes on forest insurance.

Mäkitalo speculates that, for example, the proliferation of storm damage will feel in the purse in the future.

\”It may be that insurance premiums will increase or the level of compensation for damage is reduced,\” he ponders.

The insurance industry has long been investigating the effects of weather phenomena caused by climate change on damage risks.

In any case, risk factors are in change and react in the industry.

– Then how does it hit different types of insurance varies quite a lot. In particular, floods have been regarded as a natural phenomenon that is influenced by climate change in Finland, says Ijäs.

Year of weather damage in south-west Finland

Last year, in particular, southwestern Finland experienced a variety of extreme weather phenomena. Early in the year, the frostbite and skulls were the frostbite and, at the end of the year, in addition to the storm Lyly, there were exceptional floods in the area.

Middle Tapiola Western Finland operates in the area bordered by Parkano, Uusikaupunki and Huittinen, exactly where the extreme weather phenomena hit last year.

This is reflected in the company’s last year’s key figures, which it reported last week. The insurance claims it paid rose to the record level.

Compared to 2023, the growth was about ten percent, although it was already a record -breaking year for compensation.

The Storm and Flood damage alone in Middle Tapiola Western Finland replaced 1,600 copies and paid a compensation of approximately EUR 6 million in its area of \u200b\u200bapproximately 250,000 inhabitants.

This is also emphasized by Hannu Ijäs, Director of the Legislative Group of the Financial Association. According to him, for example, sharing information about climate change and its effects is important.

Collaboration between the insurance, its customers and the public sector can do a lot of preparedness.

– We have the opportunity to make decisions through society planning and concrete measures to limit the economic and human impact of natural phenomena.

Hardly any need for the American model in Finland yet

Hannu Ijäs does not believe that in the insurance industry, in Finland, very radical changes in risk insurance or their prices will occur in Finland due to climate change in the next few years.

This is the case, for example, in the United States, where in the worst forest fire and hurricane areas, not all insurance companies are dare to grant home insurance.

In any case, in Finland, the insurance industry will have to be prepared for a situation where the extreme of the weather that previously defined as exceptional weather is becoming more common.

– If, for example, the weather phenomenon has happened, for example, once every 50 years, but it starts to meet once every ten years, this is no longer an exceptional phenomenon. It may have an impact on the terms and conditions of insurance, says Ijäs

Finland was also extensively rampant by Jari, which is not expected to have exceptionally high insurance claims.