The insurance industry is being affected by climate change arguably more so than any other sector of the market.
Insurance models are being upended by extreme weather. Whether it's wildfires or tropical storms, disasters linked to climate change are becoming more common and creating upheaval in how insurers make money — and the losses they may be on the line to absorb.But one insurance niche is getting a boost amid the chaos. More travel and disrupted travel plans have meant more interest in travel insurance, which covers trip cancellation, lost luggage and delays.
"The insurance industry is amongst the first to be affected by climate change. As a whole, the industry is trying to figure out what to do," said Mike Newman, chief operating officer at Parhelion Underwriting, a risk finance company that insures investments in clean energy, climate finance and the environmental commodity markets.
Meanwhile, incumbent insurance companies are adjusting to travel issues, though not necessarily linked only to weather, by switching up their offerings. Allianz made several significant changes to its travel insurance products in December of last year. Among the changes: higher benefit levels for a trip cancellation and trip interruption coverage in response to increased travel costs.