Only a quarter of Europe's catastrophe losses were insured. Lagarde wants a reinsurer for the rest

Christine Lagarde used a blog post on Wednesday to make an unfashionable climate argument: about insurance, invoices and cables rather than pledges¹. “As extreme weather becomes a regular feature of our summers, Europe must proactively prepare and be better protected against its financial fallout,” the ECB president wrote, pointing to last summer’s heatwaves, droughts and wildfires¹.

The number at the centre is the one worth keeping. Only about a quarter of catastrophe losses in Europe have historically been covered by insurance, she said, and she called on the EU to work on a public-private reinsurance scheme against climate disasters¹. Desk arithmetic: if a quarter was insured, roughly three euros in four of every loss landed on households, firms and public budgets after the fact.

The rest of her list is equally dull and equally useful. Each euro spent upgrading the grid saves more than €2 in other system costs, she said, citing industry research; better storage would carry cheap solar power into the evenings, when heatwaves strain supply most; and common rules should let firms with their own generators and batteries connect to the grid faster, so they can help at times of stress¹.

She was also clear about who pays. “Much of this investment” would have to come from the private sector, Lagarde wrote, and she did not mention any ECB role in financing it¹. She announced her resignation last week and steps down on 7 February¹.

For you, the practical point is older than any summit: check what your home policy actually covers for flood and storm. On Lagarde’s figure, most of Europe’s past losses were covered by no policy at all¹.