Report provides eye-opening new insights into the demographics of commercial victims of climate change. Young firms, which comprise not only the lifeblood of many communities but are central to national economies, do not insure against what they consider to be less frequent, extreme events, and are therefore, disproportionately bearing the costs of the vagaries of weather resulting from climate change.
With the frequency and severity of extreme weather events and unseasonal weather increasing as a result of climate change, Weather & Economics has reported on the far-reaching effects to a wide range of sectors, including agriculture (particularly for farmers of citrus fruits, avocadoes, cocoa, viticulture, and cereals) as well as for the sectors of finance, sporting events, travel, transport, automobile parts, fashion and apparel, construction, food and beverages, and snow removal, to name but a few.
It is the season of summer vacation, and one would be hard-pressed to find anyone not spending a considerable amount of time contemplating the weather and how it may be enjoyed or coped in the weeks ahead. The considerations are endless: when buying airline tickets and praying fights aren’t delayed or cancelled, packing for all eventualities (despite increasing limitations on baggage by airlines in recent years), and when booking tours and activities in advance, to name a few. However, despite all this attention to the weather, the possibilities for comprehensive insurance coverage for all aspects of the travel industry remain extremely limited.
Presently, the largest proportion of insurance for the travel sector is for airlines insuring against business losses due to aircraft damage or loss, in the same way that travellers can insure for enhanced medical expense coverage, trip cancellation/interruption coverage due to work reasons and involuntary job loss, emergency travel, etc. For both sides of the equation, the traditional insurance scheme usually entails a standard one-fits-all cover, a deduction, and a field loss assessment. For both, weather risks are not widely taken into consideration and the opportunities for more comprehensive and effective insurance for all aspects of the travel industry have surprisingly not been widely embraced.