Secondary perils, or extreme weather events such as floods, hail and wildfires, are increasing in frequency and severity worldwide, now accounting for a growing share of insured losses. Yet, many businesses still underestimate their impact on property, operations and supply chains.
For insurers, this trend is reshaping underwriting strategies and heightening the need for stronger loss-prevention measures across all sectors.
Wiebke Cundill (pictured), team lead for natural hazards and climate risks analysis at HDI Global, outlined how companies can identify exposures, strengthen resilience and improve their insurability through structured assessments and modern risk tools.
Secondary perils often appear less alarming than large-scale catastrophes like hurricanes or earthquakes, but their localised and unpredictable nature can lead to significant claims. For example, a sudden cloudburst following a dry spell may trigger flash flooding. Hail, storms, landslides and wildfires can cause extensive property damage and business interruption. These events are harder to model, making them challenging for insurers and reinsurers assessing risk accumulations and future climate impacts.
Many companies also fail to recognise how frequently secondary perils strike in certain regions. This creates uncertainty for underwriters, who increasingly need clear evidence of exposure management before offering broad coverage or favourable terms. When risks are poorly understood, clients may face higher deductibles, narrower terms or more restrictive underwriting.
A site-specific analysis is a crucial starting point, as each location has its own vulnerability profile.The use of digital tools, such as ARGOS 4.0 and EarthScan, can support rapid assessments using historical weather data, climate models and projections. These insights help businesses understand their likely loss scenarios and help insurers price risks more accurately, Cundill said.
Meanwhile, identifying critical vulnerabilities is equally important. Basements, IT rooms, production lines and high-value storage areas often feature prominently in insurance losses. Addressing these issues will improve operational resilience and signals to underwriters that a company is taking its risk posture seriously.
Risk-mitigation measures, from improved drainage to mobile flood barriers, are becoming increasingly relevant to coverage decisions, she added. Insurers are more likely to offer stable capacity and avoid imposing tighter conditions when clients demonstrate proactive loss-prevention efforts.
Partnerships also matter. Working with risk engineers and insurance partners enables clients to interpret hazard data, implement appropriate protections and support transparent discussions during underwriting.
Because climate risks evolve quickly, Cundill said that regular reviews and digital monitoring help ensure mitigation remains effective and aligned with insurers’ expectations.
Secondary perils are now a key driver of insurance losses. With structured risk assessments, targeted mitigation and close collaboration with insurers, companies can strengthen their resilience and maintain reliable protection in a shifting climate environment, she said.
