Extreme weather risks making parts of the world 'un-insurable'

(Bloomberg) –Soaring global temperatures may make large parts of the world “un-insurable,” according to Spain’s largest insurance firm.

Climate change “has the potential of changing the insurance business profoundly and making part of the world un-insurable,” Gonzalo Gortazar, CaixaBank SA’s chief executive officer, said in an interview with Bloomberg TV Friday. “It’s not happening yet, but if we keep moving in that direction this is something we will have to face in due course.” 

Gortazar’s comments come as the world heads for what is likely the hottest year ever, with July set to become the hottest month on record. Temperatures in the Spanish region of Catalonia, where CaixaBank is headquartered, hit a historic high earlier in the month as a heat wave engulfed large parts of the Mediterranean.

Rising temperatures are disrupting economic activity and daily life across the globe, sapping crops, drying rivers and raising sea levels. Scientists suspect the last several years have been warmer than any point in over 125,000 years.

Aside from being Spain’s largest bank, CaixaBank is also the biggest insurer, offering a front-row view into the economic impact of climate change. Spain is among a group of southern and southeastern European nations — including Portugal, Greece, Italy, Bulgaria and Romania — vulnerable to desertification as temperatures rise and rainfall dwindles, fueling wildfires — as happened in recent days outside Athens.