Extreme weather events could result in around $5tr of economic losses over five years as crops fail and water and food shortages escalate, insurer Lloyd’s of London has warned.
A new data tool released by the insurance giant this week models the global economic impact of a “hypothetical but plausible increase” in the frequency and intensity of extreme weather events, leading to a series of food and water shocks over a five year period.
The analysis predicts that total economic losses under its projections would likely range from $3tr in the lowest severity scenario to $17.6tr in the most extreme scenario.
The insurer said the systemic risk analysis is the first in a series it intends to publish in a bid to improve business and policymaker understanding of the inter-related nature of climate risks.
“Lloyd’s is committed to building society’s understanding and resilience around systemic risk and protecting our customers against increasing climate threats,” said John Neal, CEO of Lloyd’s. “It is critical that our market continues to collaborate with the public and private sectors to address this challenge at scale and ensure a sustainable future for all.” [Continue reading…]