LONDON (Reuters] – The impact of climate change on the insurance sector is a serious problem, according to Capgemini consultants and Efma financial industry body.

According to the report, insured losses from natural disasters have increased 25% over the last thirty years. Storms and wildfires were deemed particularly vulnerable by climate change. This has led to an even higher rise in insured loss.

Seth Rachlin from Capgemini, global head of the insurance industry, said that insurers have faced hurricanes in Texas and Florida as their main disaster risk.

We’ve already seen the effects of flooding in Europe, wildfires and Australia on wildfires, California wildfires, etc. It’s now a larger geographic problem that affects a greater percentage of the planet.

Germany, and other European countries were affected by flooding in July 2021. Heavy rains also hit Australia’s east coast earlier this season.

Rachlin stated that European insurers lead the charge in embedding social, environmental and governance issues into insurance investment and underwriting, as well as focusing on risk prevention.

According to the report, more than 30 percent of insurance companies worldwide restrict investment in non-sustainable companies and over 20% deny coverage to such companies.

A majority of insurers surveyed felt that the climate change was making it difficult for them to provide insurance in certain regions.

California, for example, has seen insurance companies withdraw due to the severity and number of wildfires.

71% of customers who purchased insurance said that discounts could make it more likely for them to reduce their exposure to natural disaster risk.

For the study, more than 4900 customers of insurance were surveyed in 16 countries between January and February 2022. Interviews with over 270 insurance professionals in 27 countries were also used to create the report.