At this week’s Geneva Association Climate Change and Environment Conference, Swiss Re CEO Andreas Berger called on the insurance and finance industries to rethink how they handle climate risks. Speaking to a global audience of policymakers and industry leaders, Berger emphasized the need to shift from simply transferring risk to actively reducing and managing it.
Berger highlighted the saying, “An ounce of prevention is worth a pound of cure,” urging that this approach become common practice in economies facing increasing weather disasters. He pointed to New Orleans’ response after Hurricane Katrina in 2005 as a successful example. The US government spent $14.6 billion on flood defenses and stronger building rules. When Hurricane Ida hit in 2021, the city avoided severe flooding, showing how prevention pays off.
The Swiss Re CEO also noted the rising costs of natural disasters. Losses grow about 5-7% each year, driven by climate change and more people living in risky areas. In 2024, global economic damage from disasters reached around $318 billion, but only $137 billion was covered by insurance. This leaves a huge protection gap — about 57%, or $181 billion — which means many people and communities face major financial strain.
Berger’s comments come as the Caribbean struggles with the impact of Hurricane Melissa, which caused heavy damage in Jamaica. Moody’s estimates losses in the tens of billions of dollars, but most are uninsured. In Jamaica, only about 20% of homes have insurance, and 95% of those don’t have enough coverage to fully rebuild after a total loss. High premiums, lack of understanding about insurance, and informal building practices all make it hard for many to get proper coverage.
Looking ahead, Berger stressed the importance of partnerships between public and private sectors. Such partnerships can help make insurance more affordable and speed up payouts after disasters, without hiding the true risks. But he warned there’s no single solution that fits all markets. For example, in mature markets, these partnerships should support, not replace, private insurance.
Berger shared examples like Swiss Re’s work with Fremont, California, the first US city to purchase flood insurance for the entire city, and the UK’s Flood Re program, which offers affordable flood insurance and funds efforts to adapt homes to future risks. Research shows investing in flood adaptation can save up to ten times what it costs to rebuild after a disaster. Berger said this makes prevention a smart investment.
Technology and artificial intelligence also have a big role to play. Berger explained that Swiss Re has used AI and machine learning for over 15 years and now applies generative AI and digital twin models to predict floods, heat waves, and sea-level rise. These tools help plan spending and design safer cities. They are also working with the US government to use AI for better disaster response and supply chain management. Still, Berger reminded everyone that AI must be used carefully—human judgment is key to avoid bias in data and algorithms.
Overall, Berger’s message is clear: dealing with climate risk requires more than paying claims after disasters. It means preventing damage, planning smarter, working together, and using the latest technology to protect communities before the next storm hits.