Climate change is driving more frequent and severe weather around the world – events that are hitting harder, lasting longer, and becoming increasingly unpredictable. This year alone, deadly floods have swept through parts of North and South America, Asia, and Europe, while powerful hurricanes, tornadoes, and storms have battered communities worldwide.

In the northern hemisphere, wildfires raged across Southern Europe, Canada, and the western United States during the summer amid record-breaking heatwaves. A United Nations-backed report has highlighted the worsening global drought crisis, with Africa, the Mediterranean, Latin America, and Southeast Asia among the hardest-hit regions.

High-risk destinations for travellers

Carl Carter, CEO and Founder of CSC Global Partners, pointed to Europe and the Mediterranean as key destinations facing growing threats from extreme heat, wildfires, and flash flooding. Highlighting the recent wildfires in Europe and the US, he stressed that all such events “pose extreme risk to life”.

Sócrates Domínguez Díaz, Communications, Events, and CSR Officer at Iris Global, echoed concerns over the Mediterranean and Southeast Asia, noting how climate change is making once-safe destinations vulnerable to severe weather. “Recent severe floods in countries like China and Romania are clear examples of this evolving landscape,” he noted.

Kathy Starko, CEO and President of TuGo, explained that rising climate volatility was creating new challenges for both outbound and inbound travellers in Canada. “In recent years, Canadians heading to the southern US, Caribbean, and Mediterranean are encountering more frequent hurricanes, floods, and heatwaves,” she said. “Domestically, inbound visitors – especially those travelling during the summer – are increasingly affected by wildfires in British Columbia and Alberta, as well as unpredictable weather events in Ontario, Quebec, and Newfoundland.”

Changing claims patterns

Carter noted that, over the past decade, there has been a steady increase in both the frequency and severity of extreme weather events, affecting tour operators, airlines, local communities, and travellers alike. “Travellers and consumers are all the more aware of the potential for these events happening to them and disrupting their plans, travels and finances,” he stated.

From an insurance perspective, Carter explained, the impact is felt across multiple sections of a travel policy – from accidents and medical claims triggered by extreme events to missed departures and travel delays caused by bad weather. “It has also become an increasing worry factor for travellers, and this in itself creates an opportunity for both the insurance and travel industry to provide increased flexibility and solutions to deliver both peace of mind and protection or even assistance in the event of climate-related events impacting travel and travellers,” he said.

Stephen Samataro, Chief Revenue Officer AXA Partners US, observed an interesting shift: while climate-related trip cancellations have declined, the company has seen that “weather-driven trip interruptions have more than doubled, from about 9% to nearly 23% of all interruption claims”. These figures show that travellers are facing more mid-trip disruptions from unpredictable weather, and Samataro predicted that post-departure claims would keep rising as climate events become more frequent.

Weather-driven trip interruptions have more than doubled, from about 9% to nearly 23% ‎of all interruption claims

Díaz noted a marked rise in cases where travellers had to extend or cut short their trips due to heavy rain, heatwaves, or storms. This, he explained, had prompted insurers to “strengthen response and assistance protocols”. He added that the industry’s response also included “dynamic risk assessments, operational adjustments, and strengthened pre-travel communication”. Díaz observed that travellers themselves were beginning to adapt, rethinking itineraries, and opting for destinations with lower climate exposure.

Further evidence of shifting traveller behaviour comes from the Aon Affinity Travel Practice Survey 2024. Carter pointed out that 60% of respondents had experienced travel disruptions in the past year, with 44% of these cases caused by weather. Over half (56%) said they would now think twice before booking certain destinations because of potential bad weather – up 7 percentage points since 2019 – while 26% expressed specific concerns about natural disasters or extreme weather impacting their trips.

Assessing risk

Samataro confirmed that climate change had made assessing risk more complex for insurers. He noted that companies were now refining their models to factor in destination-specific climate risks, the traveller’s point of departure, the timing of the trip, and even how far in advance the policy was purchased. “These factors can materially influence the likelihood of a weather-related disruption. I expect we’ll see more insurers incorporating this level of granularity into pricing as climate patterns become more volatile and data-driven risk models become more sophisticated.”

Building on this, Starko noted that insurers were moving away from relying solely on historical claims data. Instead, they are integrating climate forecasting and predictive analytics into both pricing and policy design. “Climate change is accelerating the adoption of forward-looking risk models,” she said. “Traditional pricing approaches based on historical claim data are being supplemented with climate forecasting and predictive analytics.

This shift allows insurers to better assess risk by season, geography, and traveller profile.”

Underwriting and emerging exclusions

Starko also pointed out that dynamic underwriting practices were emerging, with some policies including restrictions or exclusions tied to known climate events at the time of purchase. While base pricing for travel medical policies hasn’t changed dramatically, she noted that insurers were building more flexibility into product design. “For example, enhanced trip interruption or delay coverage may be offered separately or as an add-on,” she said.

Carter added that products such as enhanced trip disruption were becoming increasingly popular, offering extended protection against weather-related disruptions. However, he cautioned that the industry still lacked clear standards on what these policies actually cover.

Expanding coverage definitions

In response to climate-driven disruptions, Samataro explained that travel insurance policies had evolved since 2019 to expand the covered reasons for trip cancellation and interruption and to provide broader, clearer definitions around coverage. Terms such as ‘hazardous weather conditions, including but not limited to’ and ‘any severe weather condition that delays the scheduled arrival or departure’ have been added to provide travellers with greater clarity and stronger protection against unpredictable events.

“On the coverage side,” he added, “we’re also hearing more requests from travel providers for protection against non-traditional climate impacts, such as extreme temperatures or poor air quality at the destination. These conversations are starting to influence product design in meaningful ways.”

Educating travellers and meeting demand

Starko stressed that educating travellers about how coverage applies to developing natural disasters was becoming a growing priority, adding that at TuGo this was equally important for Canadians travelling abroad and for visitors coming to Canada. She noted that, among the latter, “there is growing awareness of the need for protection against climate-related emergencies during their stay, particularly during summer and fall, when wildfire and air quality risks peak”.

Educating travellers about how coverage applies to developing natural disasters is ‎becoming a growing priority ‎

Starko highlighted the consumer perspective, observing that “travellers want clearer exclusions and more targeted add-ons. There’s increased demand for more comprehensive coverage against climate-related issues. For outbound Canadians, this includes enhanced trip interruption benefits or flexible cancellation options in response to changing environmental conditions.”

The benefit of parametric solutions

Parametric solutions are increasingly being seen as a game-changer, offering a faster way to support customers when extreme weather disrupts their travel plans. Carter stressed that traditional travel insurance often failed to offer immediate assistance for weather-related issues such as flight delays or cancellations. “Traditionally, the traveller has had to fend for themselves, pay out of pocket and then go through the hassle of claiming,” he said.

However, he predicted that parametric solutions would expand globally, with real-time flight and luggage delay coverage becoming standard features over the next five years. He pointed to the Canadian market as an early adopter, where such solutions are already widely used due to the extensive travel disruptions caused by the country’s extreme winter weather.

Referencing a Consumer Intelligence Viewsbank survey from 2021, he highlighted: “Over 62% of 1,027 consumers interviewed stated they were very interested or somewhat interested in a policy that paid a pre-agreed sum in the event that weather ruins their trip. This bodes well for travel and weather insurers alike.”

Carter noted that the introduction of parametric flight delay and weather solutions had driven significant growth in insurers’ gross written premiums (GWP). Consumers are responding positively as well, and when offered parametric as an add-on to a traditional policy, uptake in some markets has even surpassed other popular options, such as gadget insurance.

The future

The consensus was that climate change will have a significant impact on travel and the travel insurance industry. Starko predicted that rising climate risks would drive higher claim volumes, particularly for trip disruptions and weather-related medical emergencies. She expects policy structures to evolve, incorporating real-time risk adjustments based on environmental data and
wider adoption of parametric insurance products. She also
foresaw growing consumer demand for flexible coverage and a shift in traveller behaviour, with destination choices increasingly influenced by seasonal safety and environmental considerations.

Carter agreed, highlighting that parametric solutions would be central to managing extreme weather events in travel insurance. He added that geographic location and weather were likely to play a larger role in underwriting and rating processes. Volatility and the severity of weather events, he noted, would impact areas such as cancellation, curtailment, and trip disruption, while also driving the creation of new types of coverage to address these evolving risks.

Díaz emphasised that climate change would not only shape traveller behaviour and product development but also encourage more proactive communication between insurers and policyholders, through alerts and preventative guidance.

Summing up, Starko concluded: “The industry will need to remain agile, combining technology, real-time data, and transparent customer communication to meet evolving needs in an increasingly unpredictable climate environment.”