EIOPA proposes natural catastrophe risk scores for buildings to encourage proactive risk prevention by home and business owners

The European Insurance and Occupational Pensions Authority (EIOPA) today put forward a proposal for a natural catastrophe risk awareness and prevention tool designed to help property owners reduce the vulnerability of their buildings to extreme weather events, limit potential losses and ultimately contribute to Europe’s long-term resilience in the face of climate change. The proposed tool, PROTECT, would be available to all European citizens and support them in better understanding how climate change could affect residential and commercial buildings — and what actions they can take in response.

Global temperatures are rising, and Europe is the fastest-warming continent in the world. As a result, natural disasters such as storms, floods, droughts and wildfires are becoming more intense and more frequent. As these climate-related risks increase, households and businesses face greater damage and may encounter significantly higher insurance premiums. Without decisive action, insurance in certain areas may become unaffordable or even unavailable, with serious implications for communities and local economies. Strengthening awareness of natural catastrophe risks and promoting preventive measures are essential to avoid this outcome.

The case for an EU-wide risk awareness tool

Increasing citizens’ understanding of their exposure to natural hazards is a crucial step toward greater climate resilience. When combined with clear, practical guidance on how to reduce risks, such awareness can become a driver for action and play a key role in narrowing Europe’s insurance protection gap.

Although a wide range of awareness tools exists, no tool provides Europe-wide data and few bring mitigation advice together in one place, offer practical and actionable solutions, or explain how these could impact insurance coverage. A user-friendly, intuitive and engaging tool that moves from awareness to tangible action could make a meaningful difference.

Key features of PROTECT

EIOPA therefore calls for the development of a consumer-centric, accessible tool that integrates practical, actionable information with risk awareness. In addition to a risk score, PROTECT should also provide future users, in a layered format, with:

• tailored risk prevention measures that property-owners can take to reduce their exposure to relevant perils for before, during and after events;
• key insurance-related considerations, including the need to understand possible exclusion clauses, limits and deductibles, as well as the features of a national scheme where applicable;
• insights into the potential positive impact that prevention measures may have on risk-based insurance premiums.

To achieve broad awareness and drive meaningful change, the use of PROTECT within the European Union could be considered at key moments — for example, when purchasing or developing a property, or when taking out insurance coverage.

While awareness cannot by itself eliminate climate risks, PROTECT can serve as an important point of guidance for families and businesses and form a valuable part of wider efforts to strengthen societal resilience through mitigation and adaptation. Its use would enhance awareness of emerging risks and support better outcomes for individuals, communities and the insurance sector, promoting the availability and affordability of private insurance coverage and reducing protection gaps.

Read the paper

Take a look at the factsheet summarising the key findings

Dashboard with the tools analysed for this paper