Late frosts in April damaged Europe’s largest wine-producing nations, even in locations that are historically frost-free. Then, a devastating hailstorm hit Chablis. And now adverse weather has hit Brazil. And hit it hard. Torrential rains have led to the death of at least 100 persons and displaced over 160,000 others, severely damaging local vineyards. Chaotic weather patterns and climate volatility continue to surprise us.
This isn’t a new phenomenon, yet the frequency and variability of these disasters are increasing. Once again, Mother Earth is demonstrating that overexploitation by humankind has consequences, manifesting in one weather calamity after another.
This raises a critical question: are producers adequately prepared for these situations? Successful businesses prepare for such eventualities—be it frost, hail, flood, drought, or fire—by building up financial reserves. Or by insurance policies.
“If you're not insured, you might as well give up,” one grower stated bluntly. Yet, obtaining insurance is becoming more challenging. For instance, in California, some insurers will no longer offer policies against wildfires - or are charging unaffordable rates. Or in Germany, where it's estimated that only about half of the vineyards are insured against storms, according to Vereinigte Hagelversicherung, which covers (an estimated) two-thirds of these policies.
Many insurance companies now calculate risks differently. Instead of looking at past experience, they reflect the anticipated impacts of climate change. This "catastrophe modeling" could well be the future of risk assessments. Even if this leads to considerable price increases, it seems unlikely that higher premiums will be sufficient to cover the expected risks. Long-term strategies will need to combine risk mitigation, responsible property management – and most important State support. This means that the taxpayer has to foot the bill. In view of ever tighter public finances, this is not getting any easier. Political changes are necessary.
Ultimately, could insurance companies be the ones to convince staunch climate-change skeptics that change is necessary?
