Insurers Pull Back Coverage as Climate Change Threatens Whole Regions, Report Finds
Insurers are beginning to drop climate-related coverage, shifting losses to governments and homeowners, a new Inside Track report says.
A report released by the UK nonprofit Inside Track, drawing on confidential insights from roughly twenty-four senior insurance professionals across the UK and Europe, indicates that insurers are increasingly withdrawing from climate-driven risks and passing the financial burden onto governments and homeowners. The withdrawal has already begun, with property insurers scaling back or cancelling wildfire policies in California and hurricane coverage in Florida and Louisiana, and only about a quarter of natural catastrophe losses in Europe currently insured.
Executives such as Aviva chief executive Amanda Blanc and Allianz director Günther Thallinger have warned that rising flood risk and entire regions could become uninsurable. Lord Nicholas Stern, chair of the Grantham Research Institute, cautioned that existing risk-pricing models underestimate the threat, creating potentially unmanageable mispriced exposure. The Association of British Insurers says it invests heavily in scenario analysis but acknowledges that resilience requires coordinated action across government, industry and society. Analysts note that insurers’ short-term pricing horizon limits their ability to help clients manage long-term risk.
Why it matters
Growing insurance gaps leave governments and homeowners to shoulder climate-related losses, heightening economic vulnerability.
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