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Insurance 2023 - the year ahead
Insurance industry to heavily monitor the drought crisis in 2023
It’s easy to think that the earth’s water supply will never run out, what with all of the hurricanes, flooding, and other natural disasters taking centre stage in the media these days. But water scarcity is a very real problem, and it’s one that the insurance and legal communities are going to be watching closely in 2023 and beyond.
The largest water supplier in the US recently declared a drought emergency in Southern California. This will possibly result in mandatory water restrictions beginning early in 2023, and will definitely impact millions of people and businesses. Reservoirs are depleting, wells are drying up, and water deliveries remain low.
A drought’s impact is far-reaching and touches every part of our ecosystem, from human life, to crops and vegetation, and even to livestock. Water shortages also affect wildfires; dried out land can feed fires and make them larger, and a lack of water also affects the ability to put out the fire.
While top of mind for many, especially those in California, the water shortage issue is going to be one that every insurer is going to monitor more closely in the year ahead.