The frequency and severity of natural catastrophe impacts to built assets are increasing. Governments and their taxpayers are taking increasing shares of disaster relief from such events, creating an ever larger deficit in public funding, or climate resilience gap.

Executive Summary

Insurance alone cannot change government rules which permit accretive risk. And temporal mismatches between insurance policy terms and the manifestation of climate change mean that risk-based price signals from insurers will not close resilience gaps, Zurich's Lindene Patton writes. At the same time, research shows that communities that have faced disasters without insurance take decades to recover economically, she notes, stressing the need for public-private partnerships to improve resilience.

In addition to losses from episodic events, with climate change we also likely will see impacts of other types that occur over longer periods of time (e.g., melting glaciers, water shortages).

The trends in disaster assistance costs suggest that an increasingly large percentage of assets are uninsured or underinsured globally.

In the case of extreme weather events, significant assets and hundreds of communities in the United States are not sufficiently resilient. Risk management systems currently in place—whether engineering, land-use policies, insurance uptake or disaster aid—are often not sufficient to withstand the catastrophe or achieve the rapid recovery necessary to be deemed resilient.

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