Climate change increases both heart attacks and hailstorms: Why Czech insurance is about to change
Property damage due to extreme weather events in Czechia has been increasing for a long time. According to the Czech Association of Insurance Companies, last year was another confirmation of this trend. Due to the autumn floods, as well as other intense storms and precipitation, covered damages reached more than CZK 36 billion. But this is not a Czech specialty—insurance companies all over the world are dealing with it.
When floods swept away part of the village of Jeseník in the Olomouc Region last autumn after record torrential rains, it was a human and financial tragedy for the inhabitants. And the economic consequences do not end with the counting of the damage, but are also reflected in the future.
The mayor of Jeseník, Zdeňka Blišt'anová from the Jeseník by Heart (“Jeseník srdcem”) movement, explained the insurance policy:
"We had a good insurance policy—25 million for cleanup and 50 million for flood recovery. But it expired at the end of the year. We requested the same policy again, but no insurance company came forward except our existing one. And this time, it insured the same coverage, but three times as much. So, what used to cost us a million a year now costs around three million."
The reason for this is that insurance companies, because their business and existence depend on it, do not question the scientific conclusions of climatologists—on the contrary, they trust their models, so they are counting on the fact that similar extremes and insurance claims will recur more often due to ever-rising temperatures. Radim Tolasz, climatologist at the Czech Hydrometeorological Institute, touched on the impact of climate change on extreme weather conditions:
"There was a similarly large flood in this area in 1903, then in 1997, and now in 2024. In between, there were many smaller floods. As global temperatures, as well as temperatures in central Europe and the Czech Republic, continue to rise slightly, it can be expected that a similar flood will likely hit Jeseník and the surrounding area sooner than 27 years from now. This must be taken into account and prepared for, as it aligns with climate models."
Adaptation to a warmer world and the rapid reduction of greenhouse gas emissions are therefore in the interest of both the insured and insurance companies. This is a problem being addressed not only by Czechia but by the entire world. For example, due to intensifying hurricanes in Florida or increasingly severe fires in California and Canada, there are more and more areas where properties are virtually uninsurable.
As a result, domestic insurance companies are reacting to the worrying trend, Adam Voldán, a consultant at the Czech Association of Insurance Companies, explains:
"What will increase are very heavy, localized atmospheric precipitation events. We know their frequency is rising. From 1960 to post-2030, the probability of these extreme storms is expected to roughly triple. To keep premiums low, we need everyone to be insured to spread the risk.”
Voldán explains that last year, Czechia experienced 57 tropical days, i.e., days when the temperature exceeded 30 °C somewhere in the shade. The average number of tropical days is rapidly increasing due to climate change. In Brno-Tuřany, for example, their number has more than tripled since 1990. And with the rising heat, life insurance policies are also becoming more expensive. Voldán continues,
"There are studies showing that the risk of heart attacks increases significantly in the summer. This impacts people's mortality rates. So, when insuring something, such as saving for a mortgage, insurance companies must already take into account the fact that our climate is changing, the risk of people dying is rising, and the mortality tables we rely on are evolving. This affects all insurance companies and all departments."
Voldán leads the Moses Working Group at the Czech Association of Insurance Companies, which focuses on ensuring that insurers are able to respond to a changing climate and more intense natural extremes. They collect data, follow scientific models of further development of warming.
