Europe Faces New Climate Risks as Traditional Models Falter
While Europe’s intense heatwaves may no longer dominate headlines, the risks they highlight persist. According to BELFOR’s Martin Schachtschneider, risk managers must confront a future where past loss scenarios, historical data, and recovery assumptions may no longer serve as dependable guides.
Extreme Weather’s Ripple Effects
This summer, Europe endured unprecedented extreme weather, with temperatures reaching all-time highs. Repeated heatwaves and severe droughts caused the continent’s four major rivers—the Loire, Po, Rhine, and Danube—to drop to record-low levels. This has disrupted cargo shipping, hydroelectric power generation, and power plant cooling systems.
The impacts extend beyond immediate environmental concerns. As summer wanes and wildfires diminish, companies may face heavy rainfall and potential flooding. This shift is closely linked to El Niño, a global climate pattern driven by changes in wind and sea surface temperatures, which is expected to be particularly intense.
The El Niño Factor
The El Niño phase that began in 2023 resulted in the hottest year on record, with 2024 temperatures nearly 1.5 degrees above pre-industrial levels. It’s possible 2027 could surpass these temperatures. However, this doesn’t guarantee unprecedented rainfall across Europe. Instead, it increases weather volatility and uncertainty, which traditional risk models fail to capture.
Munich Re emphasizes, “Using historical statistics alone for risk management is not enough. Instead, fluctuations from natural climate cycles need to be considered, and the long-term effects of climate change precisely mapped in the risk strategy.”
Rethinking Risk Models
Even with updated models, risk managers will struggle to predict or control losses in such unpredictable conditions. However, examining the typical sequence after a natural disaster, loss event, damage, business interruption, recovery, restart, reveals an area for optimization: the recovery phase.
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Recovery and restoration are critical when disasters strike. For many companies, insurance isn’t the immediate concern; it’s about recovery, restoration, and ensuring providers are ready to assist. When disaster occurs, disaster recovery contractors are often overwhelmed with emergency calls, leaving no time for tenders or bidding. Companies aren’t just restoring facilities; they’re fighting for survival.
The Availability Illusion
Some companies have failed in this fight. Those without contracted suppliers have waited weeks for assistance. Even basic tasks like pumping out basements or removing screed were delayed. During this time, moisture deepens, mold spreads, corrosion damages equipment, and harm worsens daily.
To avoid the availability illusion, risk managers need a clear understanding of resource availability both domestically and internationally. Companies must contractually secure partners with the capacity and expertise to respond in emergencies, ensuring priority service during major disasters. BELFOR’s RED ALERT® service offers this priority, proving invaluable by placing clients at the front of the line when disaster strikes.
“In Italy, one of our sites was badly affected by the 2023 floods,” said Matthias Beck, head of insurance and risk management at Würth Group. “When the phone rang, I was able to reassure my colleagues immediately: BELFOR is coming. They have the necessary resources and know Würth. Würth is a RED ALERT® customer and, therefore, enjoys priority status.”
For over 50 years, BELFOR has helped companies minimize business interruption after disasters, demonstrating how effective risk management can make a critical difference. The next catastrophe could be a flood, storm, wildfire, or an entirely new threat. Risk managers must challenge the assumption that help will automatically be available after a loss. In today’s climate reality, resilience begins before the event, and availability must be secured before the need arises.
