Insurers lag climate action as disaster losses hit $280b

Less than half of disaster losses from 2015 to 2024 were covered by insurance.

Asian insurers outperformed their European and North American peers on biodiversity measures, but the global insurance industry remains behind on climate action as rising disaster losses expose growing gaps in coverage

Natural disasters caused an average of $280b in direct economic losses a year between 2015 and 2024, with less than half covered by insurance,

According to ShareAction, climate change and ecosystem degradation are making insurance unaffordable or commercially unviable in some regions.

Most insurers received grades of D, E or F, with only a small number achieving C or B. German insurer Allianz was the highest-ranked company with a B grade, whilst Dutch insurer Achmea was the only other insurer to receive the same rating.

The report said many insurers continue to underwrite and invest in activities linked to climate change and biodiversity loss despite the growing financial risks associated with these issues.

ShareAction said progress has slowed since its previous benchmark was published in 2024, with fewer insurers introducing new climate and sustainability commitments. 

However, it noted there had been no widespread reversal of existing commitments. The report found that 16 of the 20 standards assessed had been met by at least one insurer, showing that stronger practices are achievable.

The report also highlighted weaker performance amongst Lloyd's of London managing agents. 

Amongst the 10 largest independent managing agents, only 30% had restrictions on underwriting upstream coal projects, whilst none disclosed a target to achieve net zero emissions by 2050. 

By comparison, 80% of conventional insurers had coal underwriting restrictions, and 64% had announced 2050 net-zero targets.

ShareAction found that 73% of insurers had no underwriting restrictions on upstream oil and gas expansion, whilst 33% had no coal underwriting restrictions. Where restrictions existed, the report said they often contained exemptions.

It also found that more than 90% of insurers involved in treaty reinsurance had no underwriting restrictions related to climate, biodiversity or social risks.

On biodiversity, around two-thirds of insurers did not disclose any location-based underwriting restrictions for environmentally sensitive areas, instead relying on due diligence or monitoring frameworks.

The report also found that most insurers do not restrict their involvement in weapons prohibited under international law. 

None of the insurers assessed specifically referred to autonomous weapons in their underwriting or investment policies.

ShareAction and WWF urged insurers to strengthen their climate, biodiversity and social policies. 

They also called on policymakers to introduce stronger regulation, including measures to hold polluters accountable, penalise insurers that contribute to the risks they insure against, and adjust solvency rules to encourage long-term climate resilience.

The fourth edition of ShareAction's Insuring Disaster report assessed 40 of the world's largest property and casualty insurers, including 30 conventional insurers and 10 managing agents at Lloyd's of London.