The United Nations Environment Programme Finance Initiative’s Principles for Sustainable Insurance Initiative has released a white paper outlining six ways insurers can support climate adaptation and preserve insurability. Published at the COP31 Global Sustainable Insurance Summit in Antalya, Türkiye, the paper argues that reducing risks before losses occur is essential as insurance protection gaps widen, including in Australia, Europe and North America. Assets becoming uninsurable can also undermine their bankability and investability, threatening financial stability.
Insurers can use claims data, catastrophe models and climate analysis to quantify adaptation’s costs and benefits, alongside risk engineering advice to identify measures that deliver the greatest risk reduction for available resources. Underwriting can reward adaptation through pricing and policy terms that reflect reduced risk. Insurance can also support the development, deployment and operation of resilience projects, while covering risks that adaptation cannot eliminate to give lenders and investors confidence to provide financing. Claims payments can help policyholders rebuild more resiliently after losses.
Adaptation finance remains far below assessed need, including where investment could materially reduce risks threatening insurability. The recommendations extend beyond insurance: asset owners and operators can invest in reducing vulnerability, while lenders and investors can recognize resilience in financing decisions. Policymakers, regulators and public authorities can establish conditions for resilience to be recognized, valued and rewarded at scale.