Zurich releases report addressing climate risks

Zurich Insurance Group (Zurich) releases the “Climate Risks: Strategies for Building Resilience in a More Volatile World,” report emphasising the urgent need for coordinated action against the rising threats posed by extreme weather and natural catastrophes. The report outlines the increasing costs of these events, highlights the role of insurance, and offers recommendations for policymakers to build resilient societies and economies.

Extreme weather events such as hurricanes, floods and wildfires caused about USD2 trillion in economic losses over the past decade according to the International Chamber of Commerce. The frequency and intensity of these events are increasing, potentially exacerbated by long-term climate shifts like temperature variations, rising sea levels and changes in precipitation patterns.

“The insurance industry is uniquely positioned to help strengthen resilience to physical climate risks,” said Alison Martin, CEO EMEA and Bank Distribution. “However, addressing the escalating costs of extreme weather and natural catastrophes requires collective and immediate action. Our paper provides a roadmap for how governments, insurers and communities can collaborate to meet the growing challenges posed by extreme weather and natural catastrophes.”

Insurance is crucial in protecting households, businesses and governments, helping them recover financially from the effects of natural catastrophes. However, insurance coverage is not keeping up with growing losses, leading to more underinsured or uninsured households and businesses.

Zurich advocates for a new approach that focuses on risk reduction and extending insurance coverage to protect communities and businesses. The insurance industry can provide risk management insights and capabilities to strengthen resilience to physical climate risks. By de-risking capital flows, the industry can also help unlock the necessary finance to build the infrastructure required to deliver that resilience, enhancing the protection provided by insurance.

Teresa Wong, Chief Risk Officer – General Segment / Head of Sustainability Risk at Zurich Malaysia, emphasises “The growing volatility of climate-related disasters globally demands that we reframe the role of insurance and takaful beyond traditional risk transfer. While financial protection remains critical, our focus must also shift towards risk prevention, reduction, and resilience-building strategies. This is particularly relevant in Malaysia, where our Climate Resilience Survey highlights that more than half of respondents feel unprepared, with many citing financial constraints as a key barrier to readiness. As insurers, we must harness our risk expertise to support customers and communities not just in recovery, but in building long-term adaptive capacity. Now more than ever, strengthening climate resilience is fundamental to ensuring protection remains accessible and sustainable in the face of escalating risks.”

However, the insurance industry cannot tackle this challenge alone. A coordinated effort between the private and public sectors is needed. This paper makes three recommendations for policymakers:

Zurich remains committed to working with stakeholders worldwide to build a more resilient future, ensuring that communities and economies can thrive despite the growing challenges posed by climate risks.

For more information on Zurich Malaysia’s insurance and takaful plans, please visit zurich.com.my.