Climate Risk, Insurance, and Adaptation in India

The article discusses how India faces increasing financial risks from climate change-induced extreme weather events, such as an uneven monsoon and strengthening El Niño. It highlights the significant 'protection gap' where a large portion of property and economic activity remains uninsured against natural catastrophes. While advanced catastrophe models offer more precise risk assessment, they also reveal higher costs, posing challenges for the insurance industry regarding pricing, capacity, and affordability. The article emphasizes that insurance alone is insufficient; robust adaptation measures are crucial to reduce underlying risks. It advocates for a multi-stakeholder approach involving governments, insurers, and international bodies to share disaster losses and build financial resilience, moving beyond merely pricing risk to actively reducing it.