The insurance industry is integral across various sectors and industries and is important in the economic activity of any country as it is responsible for protecting insured individuals, households and businesses against risk (Smet, 2023). Change of climate is one of the most tangible ecological issues affecting insurance companies and for insurance companies to remain viable and sustainable, they need to adapt, and adaptation takes a form of behavioural change (Webster and Clarke, 2017). The increase of disaster events in South Africa affected the insurance industry negatively across the lines of business as climate change induced natural catastrophic (Nat Cat) events result in the increase of insurance claims. The increase in disaster events resulted in SA being reclassified as a region with high Nat Cat events, which then led to insurance companies increasing rates, premium and change of terms and conditions to the insured. The findings of the investigation suggests that the South African insurance industry is well appraised and active in the climate change discussions however, the industry is reactive operationally and have not yet fully put measures to mitigate the increasing natural catastrophic (Nat Cat) losses to protect itself against the rising claims.

Keywords

Insurance Industry, Climate Change, South Africa, Natural Catastrophe, Risk Mitigation