A new survey shows that climate change could cost the country's insurance industry up to €1.5 billion over the next decade.
The survey of 115 of Ireland's leading insurance experts, conducted by Deloitte, found that 38% put the cost of dealing with the impact of extreme events, such as flooding or storms, at €1 billion to €1.5 billion.
34% of insurance experts said it would be more than €1.5 billion.
The range of companies which took part in the survey included Allianz, Axa, FBD, RedCLick and Zurich.
The survey also found that 76% of respondents elieve the Government should invest in national and local flood defences as a key initiative to address the increasing prevalence of extreme weather events.
This was ahead of acting as a reinsurer of last resort (17%) and providing subsidies or financial support for climate adoption measures (7%).
The survey also found that 30% of respondents said the availability and cost of reinsurance was the biggest challenge facing insurers providing flood risk cover, followed by stakeholder communications and flood protection planning (24%), modelling capabilities (16%), and trust in the timely use of demountable flood protection systems (14%)
Meanwhile, 49% of those surveyed said a pooled insurance risk initiative, such as Flood Re in the UK, would be the best way to improve the availability of flood risk insurance.
Flood Re is a joint initiative between the UK Government and insurers aimed at making the flood cover part of household insurance policies more affordable.
It also revealed that 54% said the Government and the insurance industry should work together to address flood risk by setting standards for flood-proofing homes in at-risk areas.
Noel Garvey, Actuary and Partner in Audit & Assurance at Deloitte, stressed the significance of industry-specific preparation to address climate change challenges.
"As a society, we all have to understand that prevention goes hand-in-hand with mitigation. The insurance sector needs to ensure it is equipped with the latest data and insights to evaluate and manage risks effectively," Mr Garvey said.
"From the increased frequency of flooding to the risks posed by changing weather patterns, now is the time to stay one step ahead wherever possible, to prepare us all for new and emerging future weather-related risks," he said.
He said that while the survey of insurance experts is a snapshot of the challenges the insurance sector is experiencing, it has fascinating insights including 38% thinking the cost of climate change for insurers will run from between €1 billion to €1.5 billion, with a further 34% expecting costs of over €1.5 billion and potentially as much as €5 billion
"When uninsured losses are included in the overall cost of damage to infrastructure, property, agriculture and human health the total economic losses from extreme weather-related events will be substantially higher than these estimates," he cautioned.
