The 2026 Drought – a Wake-up Call to Make Risk Management Fit for the Future

The heat and drought of recent weeks have affected many persons health and well-being, whilst the Austrian agricultural sector in particular has suffered immediate, visible and tangible economic damage. This WIFO Research Brief first presents a preliminary assessment of the relief measures adopted in August 2026. It is emphasised that, for the first time in an event of this scale, insured persons are not being treated less favourably than those without insurance. However, the main focus is on the questions of what measures can be taken to limit negative economic impacts, and how the risk management system – which functions well in many areas – can be made fit for the future. Strengthening insurance schemes and the use of loans to finance climate change adaptation measures are market-based approaches in this regard.