Dubai Storms: Climate Wake-up Call for Rising Insurance Costs
04.05.2024 - 22:47
/ skift.com
/ Tim Clark
/ Jesse ChaseLubitz
Dubai, situated in one of the world’s driest regions, was hit with a second bout of heavy rains and strong winds this week — just two weeks after the desert metropolis was covered in a year’s worth of rain in the span of 12 hours.
Dubai’s extreme weather may lead to insured losses of up to $850 million across infrastructure, roads, buildings, vehicles, and public facilities, estimated the reinsurance broker Guy Carpenter.
The extreme weather event is one of many that have brought attention to climate insurance, and experts expect policy prices to rise. From airports to tours to hospitality to destination management, unforeseen climate events can have extreme impacts on the travel industry.
Between April 14 and 17, floods brought Dubai to a standstill. The city’s airport, the second-busiest in the world, shut down, hundreds of flights were canceled, and people and cars were stranded. In Dubai and neighboring Oman, 21 people died.
Emirates diverted dozens of flights and canceled nearly 400 in the three days following.
”We know our response has been far from perfect,” said Emirates CEO Tim Clark in a statement.
Some initial reports blamed the floods on a technology the United Arab Emirates has been funding called “cloud seeding.” It involves small jets flying into rain clouds and spraying them with sodium mixtures meant to expand the droplets and encourage more rain.
The technology does work to spill buckets of sudden rain on parts of the UAE every now and then.
However, experts said cloud seeding is too small scale to create downpours like what Dubai endured. Instead, climate change was the most likely culprit. And it will almost certainly happen again.
Despite the shocking nature of the event in Dubai, it isn’t actually unprecedented. In 2022, flash floods destroyed homes and infrastructure in the UAE, forcing more than 3,800 people to evacuate. The World Weather Attribution found that 85% of the UAE live in flood-prone areas.
Other impacts of global warming, such as rising temperatures, are also creating consistent financial and operational liabilities for travel companies.
In 2023, a wildfire that lasted for six days forced 25,000 tourists to evacuate from the Island of Rhodes. EasyJet and TUI operated repatriation flights and Greece launched “free” holidays for those who had to flee.
Increasingly hot summer days have already made it impossible for some operators to schedule active trips like cycling vacations in Southern Europe.
“It’s simply too hot,” said Shannon Stowell, CEO of the Adventure Travel Trade Association.
Stowell says he knows of several operators in Italy and Spain who are looking to move their active trips to northern destinations like Scandinavia.
Other countries are