Swiss Re has warned that climate change could “magnify” an already significant increase in property damage as a result of soil subsidence.
According to a new loss model developed by the reinsurer and the Swiss Federal Institute of Technology, soil subsidence will worsen and spread in Europe, with some areas seeing a more than 50% rise in future losses.
The reinsurer warned that prolonged dry spells can cause the ground to sink by so much that cracks appear in the earth, tearing apart the foundations of houses, bridges, factories and other structures.
Climate change will magnify these risks as factors such as rising average temperatures and more erratic rainfall continue to alter soil conditions.
"As our climate continues to change, the risk of property damage from soil subsidence is not only increasing but also spreading to new regions in Europe," said Matt Weber, head of property & specialty underwriting at Swiss Re.
In a bid to better quantify and more adequately price risks associated with soil subsidence, researchers from Swiss Re and ETH Zurich have developed a new loss model.
The reinsurer added that large parts of Europe will experience more sporadic rainfall and drier soils in the future and these areas will therefore face greater losses from shifting soil, the model shows. In some regions, the soil subsidence loss potential for the period 2021– 2040 is expected to increase by more than 50% compared to today.
"Efforts to manage soil subsidence risks are most effective when they form part of a broader climate adaptation strategy that takes long-term climate impacts into account and engages multiple actors in finding the right solutions," said David Bresch, head sustainability & political risk management at Swiss Re.
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