Key messages

The report positions insurability as a strategic indicator of financial health. Assets that cannot secure insurance are unlikely to attract investment or credit. Insurers act as gatekeepers of capital allocation, with underwriting decisions shaping which projects proceed. Insurers and brokers are presented as innovation partners rather than transactional service providers. Early engagement enables co-development of solutions, particularly for climate-exposed or transition-related assets. Organisations that actively reduce vulnerability through resilience measures are more likely to retain affordable cover. Insurers increasingly reward strong risk management rather than simply pricing hazard exposure.Capital remains available but is directed towards organisations that understand insurer logic, share high-quality data, and demonstrate how climate strategies reduce risk and protect returns.Insurance pricing is model-driven. Limited understanding of metrics such as Annual Average Loss (AAL) and Probable Maximum Loss (PML) weakens negotiating positions and access to capacity. Regulation can either support or undermine insurability depending on alignment with climate science and risk models.

Insurability is a strategic priority to protect asset value

The report argues that insurability should be elevated to board-level consideration and treated as a core financial capability. Insurance is not only protection but a contingent asset enabling access to capital, credit continuity, and operational stability.Maintaining insurability requires long-term, trusted relationships with insurers and reinsurers, similar to how insurers rely on reinsurance treaties to manage solvency. Transactional approaches are increasingly ineffective in high-risk or climate-exposed sectors.Leadership teams often lack detailed understanding of their insurance programmes, vulnerabilities, and underwriting dependencies. Closing this gap is critical as climate volatility increases exclusions, premiums, and capacity withdrawal.

A framework for understanding insurability

The report identifies four interdependent drivers of insurability.Risk modelling underpins underwriting, solvency regulation, and capital flows. Catastrophe models shape portfolios and market access, with solvency standards typically based on a 1-in-200-year loss event. Organisations that engage with AAL and PML metrics can align projects with insurer thresholds and improve access to capital.Risk management is the most controllable factor. Investments in infrastructure strengthening, retrofitting, and supply-chain resilience reduce vulnerability and improve terms. Howden analysis indicates that US$6 billion in enhanced risk management could have halved estimated US$75 billion losses from the 2025 Los Angeles wildfires.Risk sharing is constrained by limited underwriting and reinsurance capacity, record losses, and insurer risk appetite. Emerging technologies such as hydrogen and carbon removal face additional barriers due to limited loss data. Ongoing dialogue and co-creation of solutions are required to bridge protection gaps.Public policy and financial regulation materially shape insurability. Building codes, zoning, subsidies, and sovereign risk pools can support coverage when aligned with climate science, or undermine it when misaligned.

Case study: Safeguarding agricultural insurability in Europe

The case study highlights a widening insurability gap in European agriculture. Only 20–30% of climate-related agricultural losses are insured. Annual average losses are projected to rise from €28 billion to €40 billion by 2050, with catastrophic losses exceeding €90 billion in severe years.Drought is the primary driver, with increasing impacts from hail, frost, and excess rainfall. Frequent, lower-level losses erode farm viability, while catastrophes threaten lenders, insurers, and public finances.The proposed response emphasises proactive, layered risk management. Actions include EU-wide climate risk data platforms, expanded use of catastrophe bonds and reinsurance, alignment of subsidies with private capacity, and linking insurance terms to farm-level adaptation and regenerative practices.

Recommendations to capitalise on insurability

Drawing on historical precedents such as urban fire reform and steam boiler insurance, the report shows that standards, regulation, and insurer engagement are prerequisites for restoring coverage and investment. Insurance functions as a governance system that enforces safer design and enables innovation.Leaders are encouraged to think like insurers by adopting portfolio-level risk perspectives, assessing concentration risk, and understanding how individual assets affect overall solvency exposure.Insurability signals, such as premium spikes or insurer withdrawal, should be treated as early warnings of structural risk. Organisations should respond through resilience investment or alternative risk-transfer tools, including parametric insurance and public-private pools.Embedding insurability into strategy requires insurance-grade analytics, monitoring market capacity, planning for long-term climate and policy shifts, and cross-sector collaboration in high-risk industries.

Shaping business decision-making for insurers

Solvency regulation requires insurers to withstand 1-in-200-year loss scenarios, shaping pricing, portfolio diversification, and reinsurance needs. Stress testing and scenario analysis inform underwriting decisions and capital allocation, reinforcing the importance of robust data and risk governance.

Conclusions

Insurability is increasingly a gating factor for investment, operational continuity, and transition credibility. It provides an early, market-based signal of climate risk and financial viability. Strengthening insurability requires early insurer engagement, resilience investment, aligned regulation, and integration of insurance thinking into financial and strategic planning.