The European Insurance and Occupational Pensions Authority (EIOPA) is recommending a recalibration of insurers’ standard formula parameters to address increasingly volatile natural catastrophe risks. Their advice follows extensive analysis in 2023 and 2024, drawing on updated climate data, new scientific findings, and sophisticated risk modeling. The proposed adjustments target perils like flood, hail, earthquake and windstorm across various European regions.

Besides refining these core risk factors, EIOPA is closely monitoring other threats such as wildfire, coastal flooding, and drought to determine if they should be included in the standard formula. These measures aim to protect policyholders and maintain the stability of the EU’s insurance market. EIOPA has submitted the proposals to the European Commission, marking a key step toward bolstering insurers against evolving climate challenges.