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EU warns climate insurance gap must be bridged

Bailey bridges were installed in Germany's Ahr region following the 2021 floods that cost Germany more than 40 billion euro. Photo: Les Impitoyables CC-BY-2.0.
The European Central Bank and the EU’s top insurance body have warned that businesses and households are not sufficiently insured against climate-related disasters, raising the risk of financial instability and economic crises. A discussion paper issued this week argued that catastrophe bonds should play a bigger role in bridging the overall climate insurance gap, while national and European authorities need to encourage uptake of policies to prevent such crises from occurring.
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