Cape Town - Amid the growing climate crisis, Earth Day today calls on everyone from government, companies and people to “invest in our planet”.
It is no idle chatter. Climate change and natural disasters are growing annually - at a cost to human life and to the economy. Climate refugees - those escaping the harsh realities of global warming and climate change where certain parts on earth are becoming uninhabitable - are set to skyrocket.
Earth Day - in its 52nd year - is one of the largest global environmental awareness movements that acknowledges Mother Nature and tackles climate action, conservation and restoration.
No longer the domain of hippies who love the earth and want to save it, the world over is realising the harsh reality that it is not earth that needs saving, but humanity from a changing natural world, that will become more inhospitable.
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Natural disasters in South Africa are becoming increasingly common as seen by the recent floods in KwaZulu-Natal and, soon, where you build your homes and choose to live will be determined by the climate.
Even insurers are factoring climate change into the premiums.
“The insurance industry is built on the concept of managing risk – and instead of simply increasing premiums, it’s already looking at ways to help clients mitigate their own risks and using data analysis to flag potential areas of future risk,” says King Price’s head of client experience, Wynand van Vuuren.
The South African Special Risk Insurance Association (SASRIA) itself acknowledges that climate change “is a risk the insurance industry will need to unpack”.
Since the 70s, in fact, there have been annual stats showing an increase in insurance claims because of natural events, such as hail, storms, and drought.
The problem is that weather-related disasters are only going to increase in the coming years, says Van Vuuren.
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The Institute for Security Studies says, for instance, there’s been a 57% increase in weather-related events over the past 20 years, compared to the preceding two decades, and climate scientists believe this trend will continue to rise.
Many of the damaging impacts of climate change are “simply irreversible”, according to a collective admission by the authors of the Intergovernmental Panel on Climate Change (IPCC) Working Group II contribution to the panel's Sixth Assessment Report released yesterday.
Yet, even as humans and nature are being pushed beyond their abilities to adapt, there is still a brief window of time to avoid the very worst, they say. Read more here
Meanwhile, accountability for the natural disasters unfolding is seeing fingers pointed at government and big companies.
Just this week, criminal complaints were filed by a group of climate change organisations against South Africa President Cyril Ramaphosa and a number of cabinet ministers for negligence in failing to take “practical action to address the climate crisis”.
The move came after KwaZulu-Natal was hit by devastating flash floods, mudslides and landslides and resulted in the deaths of more than 443 people.
“The South African government has been part of the UN-COP and International Panel on Climate Change process since the early 1990s. Almost three decades later, not much has happened to protect South Africa from the worsening climate crisis,” the activists said.
Most critically at the centre of the climate crisis is loss of life. However it also comes at a staggering cost to the economy and the insurance industry.
The Knysna fires and Cape storms of 2017 are estimated to have cost the local insurance industry between R3 billion and R4 billion, while the estimated cost of infrastructural damage from the KwaZulu-Natal floods in 2019 was R1.1 billion. This year has already brought widespread flooding across the country, causing extensive damage to property and crops.
Global reinsurer Munich RE estimates that natural disasters caused around US$280 billion of damage in 2021, with insured losses of approximately US$120 billion - making 2021 the second-costliest insured loss year ever.
In South Africa, the industry regulator requires all insurers to maintain adequate surplus funds and reinsurance for potential claims for their exposure to large catastrophe events, like flooding and drought.
But what does this mean for South African businesses, farmers and homeowners? Van Vuuren says: “We’re already seeing the risks from extreme weather events like wildfires, flooding, storms and hail increasing in South Africa. We never want to be in a situation where people in some areas can’t afford insurance, so it’s important that we get proactive in how we support our clients to better understand and manage their risks,” he said.
“We know change is coming, and we’re ready for it. At industry level, we’re already talking about ways we can help people become more resilient to natural disasters. Our ability to offer the protection that modern society relies on, depends on it,” said Van Vuuren.
“We’ve all got a role to play in making the world a more sustainable place for all of us.”
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