The escalating costs stem from the increasing frequency and severity of extreme weather events due to climate change. These events can cause significant damage to properties, leading to higher claims and, consequently, higher premiums for commercial real estate owners.
However, the report also suggested a potential solution. By investing $3.35 billion in residential dwelling resiliency measures, insurers could make two-thirds of non-code-compliant homes more resistant to weather damage. This investment could potentially save the insurance industry as much as $37 billion by 2030 in reduced weather-related claims.
“The seismic shifts we will see in financial services as a result of emerging technology and innovation will likely be transformative and provide new opportunities for growth,” said Jim Eckenrode, managing director at Deloitte’s Center for Financial Services. “At the same time, financial services organizations will face new risks and resiliency challenges, including market volatility, impact from climate change, talent gaps and new regulations.”
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The report also explores other significant trends shaping the financial services industry, including the rise of in-app payments, the impending retirement cliff in the real estate industry, and the growing influence of artificial intelligence (AI) in finance.
