Lloyd’s: Drought-caused subsidence costliest natural hazard in parts of Europe – ‘Worse is likely to come’

August 9 (Insurance Journal) – An article on the Lloyd’s web site notes that “news reports on climate change have focused on dire predictions of more hurricanes and increasing flooding due to rising sea levels. But subsidence caused by drought, which has already become a major problem across Europe, will also become much worse due to global warming.” The phenomenon is one of the costliest, but as yet still largely unknown, risks to property. “Unlike a roaring storm, the damage wreaked by subsidence takes years rather than hours, but it can be serious,” Lloyd’s warned. In some parts of Europe, subsidence claims are now the costliest natural hazard, comparable to serious flooding, according to a report from Swiss Re – “The hidden risks of climate change: An increase in property damage from drought and soil subsidence in Europe”. In France, subsidence-related claims have risen by more than 50 percent in the past 20 years, costing the affected regions €340 million [$484 million] every year on average. The ongoing change in climactic conditions, especially drier weather in many parts of Europe, as occurred this spring increases the potential damage to property from soil subsidence. It is happening with more frequency and is “also spreading to new regions in Europe,” noted Matt Weber, Head of Property & Specialty Underwriting at Swiss Re. Swiss Re and the Swiss Federal Institute of Technology (known as ETH Zurich) have developed a new model to reliably estimate future risks and calculate expected losses from soil subsidence across Europe. Climate change is likely to “cause hotter, sunnier weather with more erratic rainfall, resulting in more droughts, which will increase the risk of subsidence,” Lloyd’s continued. “A prolonged heat wave may bake the ground, creating fissures that can tear apart the foundations of houses, bridges and factories. Evidence of these types of damages is showing up with greater frequency.” Swiss Re’s model “shows that large parts of the UK, France, Denmark, and northern regions of Germany, Spain and Italy have seen their potential subsidence risk jump by more than 50 percent compared to the period 1951-1970.” Moreover, Swiss Re indicated that “most of these regions have not adapted to the greater risk.” “Worse is likely to come. Southern areas of England, France, Spain and Italy as well as countries across Eastern Europe will see their risk of subsidence-related claims rise by a further 50 percent between 2021 and 2040 as climate change worsens,” Swiss Re stated. […]

Lloyd’s: Drought Caused Subsidence Costliest Natural Hazard in Parts of Europe via The Oil Drum