Context And Project Background

Annual economic losses from natural disasters globally exceeded US$300 billion in 9 of the past 10 years. Emerging market and developing economies (EMDEs) are highly exposed and underinsured, with insurance penetration near 3% of GDP, despite anticipating 70% of global GDP growth by 2050. The returns on resilient infrastructure range from 1:2 to 1:4. However, insurers are often engaged too late in the project cycle, resulting in a structural disconnect between risk assessment and project preparation.

Key Findings

Five core enablers determine the effective integration of climate resilience: early stakeholder engagement, current and future physical climate risk assessment, resilient siting and design, underwriting information and documentation, and proactive risk transfer strategies. Structural gaps, such as a mismatch between short insurance cycles and long-term asset lives, currently hinder resilient outcomes.

Survey Insights And Key Highlights

A survey of 25 global insurers revealed that while 84% consistently use site-specific natural catastrophe hazard data, the use of forward-looking climate risk data is far less uniform due to barriers like limited data reliability (90%) and difficulties translating scenarios into underwriting benefits (76%). Insurers strongly agree on which resilience features reduce losses, yet only 36% provide explicit incentives for these measures. Notably, 76% of respondents expect resilience measures to play a larger role in underwriting decisions over the next three to five years, and 40% apply more conservative terms when climate risk management documentation is missing.

Pathway Forward

To operationalise the five enablers, project owners should mandate a standard engagement model spanning all project phases. A standard climate risk assessment should become a minimum requirement for all infrastructure projects, linking identified risks to prioritised resilience actions. Furthermore, key resilience controls must be embedded into contracts, and resilience-linked insurance options should be explored early in project structuring to protect cash flows.

“Whole Of Society” Approach To Resilient Infrastructure

Resilience is a shared responsibility. Lenders and institutional investors must embed forward-looking physical climate risk assessments into due diligence. Governments and public authorities should integrate a resilience lens into building codes and procurement processes. Insurance carriers and brokers should proactively engage with financiers and developers to assess risks and formulate mitigation strategies that lower premium costs and deductibles.

Conclusion

Extreme climate losses are accelerating alongside global infrastructure spending. Resilience is not optional; it is a precondition for unlocking capital and ensuring assets remain functional, insurable, and investable. The necessary data, risk engineering expertise, and practical approaches already exist. The remaining challenge is the systematic integration of a climate-resilience lens into all new projects, leveraging early insurance expertise to align stakeholder incentives and build future-proof infrastructure.