Insurance helps de-risk climate projects as $6t investment needed: WTW

Credit and political risk cover are helping banks finance renewable and transition projects.

Insurance is being used to de-risk projects and attract investors amidst global efforts to cut emissions requiring $6.3t to $6.7t in annual climate investment from 2025 to 2030, according to a WTW insight. 

Much of this will need to come from private capital, but risks tied to new technologies, infrastructure gaps, and geopolitical uncertainty are holding back funding.

Credit and political risk cover are helping banks finance renewable and transition projects whilst meeting Basel standards. 

Parametric insurance is supporting debt-for-nature swaps by providing quick payouts after natural disasters, allowing countries to keep up with debt obligations whilst funding conservation.

Carbon insurance is also growing, protecting investors against risks such as credit invalidation or project underperformance. 

Analysts see the market reaching $1b in annual premiums by 2030 and as much as $30b by 2050.