Rising costs are due to the increased frequency and severity of extreme weather events caused by climate change. These events can cause significant damage to property, leading to higher claims and, ultimately, higher insurance premiums for commercial property owners.
But the report also suggests a potential solution: By investing $3.35 billion in seismic retrofitting of homes, insurers could make two-thirds of substandard homes more resistant to weather damage. This investment could save the insurance industry up to $37 billion by 2030 through reduced weather-related claims.
“The dramatic changes occurring in financial services as a result of emerging technologies and innovation will likely be transformative and bring new opportunities for growth,” said Jim Ekenrode, managing director of Deloitte's Center for Financial Services. “At the same time, financial services organizations will face new risks and resilience challenges, including market volatility, the impacts of climate change, talent shortages and new regulation.”
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The report also explores other key trends shaping the financial services industry, including the rise of in-app payments, the looming retirement cliff in real estate, and the growing influence of artificial intelligence (AI) in finance.