EU financial supervisors have intensified their push for a continent-wide natural catastrophe insurance scheme, arguing that climate change has left a growing share of European property effectively uninsurable.
The case rests largely on a single figure. The European Insurance and Occupational Pensions Authority (EIOPA) has calculated that only around a quarter of losses from natural catastrophes across the bloc were insured between 1980 and 2024.
Supervisors call the difference the protection gap and expect it to widen. Their reasoning is that storms, floods, wildfires and heatwaves are becoming more frequent and more costly, pushing risk-based premiums beyond what many households are willing to pay.
Take-up is already low. EIOPA’s 2025 Eurobarometer found 17 per cent of respondents held cover against natural catastrophe damage to property, with cost, unclear terms and an expectation of State compensation cited as the main deterrents.
The industry has supplied supporting material. The German Insurance Association warned that property premiums could double within a decade because of climate-driven claims, while France raised the compulsory surcharge funding its CatNat disaster scheme from 12 to 20 per cent in January 2025.
The policy conclusion drawn from all this is European. A joint European Central Bank and EIOPA paper published in December 2024 proposed an EU public-private reinsurance scheme pooling private risks across member states, alongside a disaster fund financed by member state contributions.
EIOPA went further on April 9, 2026, setting out with the European Stability Mechanism a continent-wide catastrophe pool supported by a loan-based public backstop. Modelling cited alongside the proposal suggested the protection gap could fall from 75 per cent to about 10 per cent, although the backstop would require up to €65 billion in capacity.
Not everyone accepts the prescription. Finance Watch, a Brussels-based campaign group, said the two-pillar design would “mutualise losses without reducing underlying risks” and called for spending on prevention instead.
Insurers themselves stand to gain. The ratings agency Morningstar DBRS judged the plan modestly positive for the private sector, partly because it would sit alongside national schemes rather than displace them.
The European Commission is due to bring forward its climate resilience and risk management proposal later in 2026. EIOPA chairperson Petra Hielkema, whose mandate was extended for a second five-year term from September 2026, has warned of “insurance deserts” forming in high-risk regions.
