Influence of Climate Change on Property Insurance Premiums in Uganda

Abstract

Purpose: The aim of the study was to assess the influence of climate change on property insurance premiums in Sudan. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: The study indicated that natural disasters, such as hurricanes, floods, and wildfires, are occurring with greater intensity and frequency due to climate change. As a result, insurers are facing higher claims payouts, prompting them to raise premiums to offset the increased risk. Additionally, regions prone to these extreme weather events are experiencing sharper premium hikes compared to areas with lower risk profiles. This trend is putting financial pressure on homeowners and businesses, potentially leading to a wider insurance coverage gap as affordability becomes a concern. Implications to Theory, Practice and Policy: Risk perception theory, actuarial pricing theory and resilience theory may be used to anchor future studies on assessing the influence of climate change on property insurance premiums in Sudan. In the realm of practical applications, implementing climate-adaptive pricing mechanisms is paramount. On the policy front, strengthening regulatory oversight is imperative. Enhancing regulatory transparency and accountability by mandating climate risk disclosure requirements for insurers and reinsurers can promote informed decision-making and risk management practices.