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Climate change is an increased risk for Nordic and European companies

06.14.2019
Topic Featured News

eil claims report

In the claims intelligence report European Environmental Impairment Liability (EIL), AIG highlights themes that reflects environmental loss. In particular, the risks for wildfires and facility fires have increased significantly, according to recent statistics from companies of all sizes and industries in the EU. The Nordic region has experienced an increase of around 30 percent, when looking at the numbers of environmental claims reported.1  

According to AIG's report, damage caused by fire is particularly alarming. Recent data show that fire events affecting property, facilities and habitats increased sharply in 2017, with a total of 15 percent of all damages documented as fire emergency response, compared with 7 percent the year before. This means more than a doubling in Europe.

“We see an increase in damage caused by fires related to the ongoing climate change within the EU. Above all, we see that companies in general are not prepared for an evolving climate change and thus pose greater risk of damage at climate related events, such as wildfires”, says Beth Forsberg, Nordic Practice Leader, EIL, at AIG.

In addition to the impact on human life and property, fires can also cause significant environmental loss through degradation of air quality via the release of toxic gases and pollutants as well as direct damage to habitats and species. Pollutants from forest fires can affect air quality for thousands of kilometers and extinguishing waters may contaminate soils, surface waters and adversely impact habitats and species many kilometers downstream from the burning area.

“In the Nordics we are starting to see an increased awareness from local authorities regarding the handling of extinguishing water after fires. Property owners are being held accountable for the clean-up of both on and off-site pollution conditions, and depending on the location of the site, this could be quite costly and include years of monitoring costs”, says Beth Forsberg.

The report is based on collected data from 104 reported events in 2017, from companies within the EU with insurances from AIG. The reported events include companies of all sizes and comprise around 30 major industry groups (including agriculture, mining, manufacturing, transportation, electricity and gas, sanitary services and waste management).

Read the full report here.

1According to statistics reported in 2017, compared with 2016.