When insurance isn’t enough: WWF and the insurance protection gap

When disaster strikes, insurance may pay some of the bill. But who pays the rest? This week on Shaken Not Burned, Felicia Jackson talks to Regula Hess, deputy head of WWF Switzerland, about the growing insurance protection gap — and why it matters far beyond the insurance industry. When losses aren't insured, they don't disappear. They fall on households, businesses and governments, affecting everything from mortgages and investment to public finances and the speed at which communities recover.  But WWF argues that simply expanding insurance isn't enough. Insurance can spread the cost of disasters; it can't stop the underlying risk from growing. That means reducing risk too — including protecting the forests, wetlands and other natural systems that can reduce damage before it happens.  Regula describes insurance as an early warning system: when risks become unaffordable or increasingly difficult to insure, perhaps we should pay attention to what that is telling us.  There is, of course, an obvious question. If preventing damage makes so much sense, why aren't we doing more of it? Part of the answer is that prevention is difficult to see. Yet research cited by Regula found that every dollar invested in climate resilience and preparedness can save communities up to $13 in damages, clean-up and wider economic costs. Which is why her description of insurance as an early warning system stayed with us. When insurance becomes unaffordable, or risks become too large or unpredictable to insure, it is telling us something. Not simply that there's a problem with insurance, but that the underlying risk is getting out of hand. Perhaps the real protection gap isn't just between what we lose and what insurance pays — it's between the risks we're creating and what we're doing to prevent them. This episode is the second in our latest Shaken Not Burned arc on the changing economics of risk.  Last week, our conversation with Dr Robert Johnston explored how water risk can build through decisions that might make sense individually, but can add up to something much more damaging. And why failing to recognise the full cost of those decisions doesn't make the cost disappear. As part of the series, we will also speak to Rachel Delhaise from Convex about the insurance market itself and what happens when a changing climate makes the past a less reliable guide to the future. Finally, co-hosts Felicia and Giulia will put the conversations together and ask what they tell us about where risk comes from, where the costs eventually end up, and what choices we still have before they do.  If you enjoyed this episode, hit the subscribe button!