The world is now so interconnected that any natural disaster, storm, or drought in one country can have wide-ranging effects across the globe.
The cost of these catastrophes – which are increasing in severity and frequency because of climate change – could, potentially, cripple companies and jeopardise the banks of nations, said Karen Ritchie, senior vice president at Baird MacGregor Insurance Brokers.
“I think that within the next 5-10 years the biggest issue [in terms of climate change] will be financial stability … of governments, of companies, and of individuals,” she said. “And we’re not paying enough attention to this, and it’s a much bigger problem than just, ‘Oh, isn’t it nice that it’s October and it’s warm’.”
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Costs are likely to rise everywhere, for everyone, Ritchie said – from governments not being able to continue to pay out mass flooding claims, to businesses losing money through supply chain failures, to individuals losing homes to forest fires at increased rates.
“Everything is all together, all connected. I think this is one of the biggest issues we’re facing – not just for Canadians, but for everybody, in the next 5-10 years,” she commented.
“Governments are seeing costs rising for what they’re having to pay out for flood damage, for instance, and they’re seeing that number rising dramatically every year – that’s going to affect the financial stability of governments, because they can’t keep bailing people out for this.
“For corporations, if they haven’t taken steps to protect their financial interests, you could see corporations [failing]. All businesses are international now, in some way. If you’re not getting your goods someplace else, you sell your goods someplace else. We’re not just a little village anymore. It’s all connected.”
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