The Un/Insurable World: Climate Insurer Perspectives

The Climate Change Research Centre

Q. How are you thinking about climate insurance in 2025? 

On one hand, I feel that insurance products today only cover a subset of all insurable climate risks. For example, while traditional insurance markets typically only indemnity cover for acute physical climate risks such as storms, wildfires, floods, cyclones and hail -  we remain exposed to emerging chronic perils more directly linked to atmospheric warming such as sea level rise and heat stress.

Other untapped innovation avenues range from expanding the use of parametric insurance to absorb derivatives of natural catastrophe losses such as mortgage risk, or adapting insurance to accelerate the net-zero transition via Energy Transition Mechanisms (ETMs) or carbon credit markets. A key consideration for excess carbon emissions is whether a cash payout constitutes adequate restitution, compelling the need for alternative carbon replacement credits. 

I think the insurance industry faces two major challenges: how to maintain affordable, and sustainable insurance capacity (as they exit from peril/regions that are too difficult to insure), and how to maintain profitability as insurers traditionally have relied on diversification and assumption of idiosyncratic risks while climate is arguably systemic in nature.

Q. How would you define your approach/ philosophy to climate risk?

As a general rule, due to significant uncertainty in climate response  (particularly downside) and hence reliable estimates of the social cost of carbon  -  the best insurance policy is a precautionary one - i.e. keeping fossil fuels under the ground.

Any effective solution to address the climate challenge requires broad based, cross-industry and international support. That being said, industry as a whole is uniquely placed to both catalyse the decarbonisation effort, support adaptation finance and sharing of its deep physical climate risk knowledge.

At a high level, I think the biggest obstacle preventing the insurance industry from unlocking its full potential is its transaction, and short term based focus on year-on-year renewals. A profound mindset shift needs to occur across major actors within the insurance value chain to develop a longer-term, bigger picture and more strategic outlook. With this outlook, tool and product innovation, as well as collaborations with other industries to tackle climate, risk is likely to follow.

Top 3 Information Gaps in Climate Risk 

Appreciation of impacts of climate risk beyond direct damages (compound events, tipping points, or wide-area damage, valuations to impacted property…etc)

Lack of sharing of common peril data/ loss information prevents broad-based acceptance of 'risky areas' where development should not be allowed to happen.

Subject matter expertise across industry - i.e. even the best data and tools will not be optimised without skilled analysts and a technical approach to risk.

Q. Do you interact with the following stakeholders: regulators, local governments, and investors? And if so, in what capacity and on what problems?

I have had experience interacting with a range of stakeholders in various capacities - but mainly from the perspective of ensuring effective climate risk communication. I would say that my core engagement has been that of a 'climate translator' - i.e. despite the myriad applications of climate risk insights, it is essential that climate science is faithfully reflected to avoid say maladaptation or spurious accuracy. I have always strived to deliver simple (but not simplistic) and clear climate risk messaging with a view on fitness for purpose.  

Top 3 Insurance Solutions Best Placed to Bridge the Climate Insurance Protection Gap:

Resilience Bonds (Insurance tied to adaptation finance to incentivize reduction of underlying risk burden)

Parametric Solutions

Insurance Solutions Packaged together with climate risk assessment

Private investment in climate adaptation has lagged because the business models aren’t as clear-cut as mitigation—there’s no equivalent of power purchase agreements or corporate carbon buyers, and the go to market is still maturing.

But that’s changing fast: adaptation startups are gaining traction, corporate players are realising resilience is a bottom-line issue, and new financing models are making these bets a lot more attractive.

The Climate Insurer

Q. How are you thinking about climate insurance in 2025? 

My view is that in 2025, climate insurance will continue to evolve rapidly to address the increasing frequency and severity of climate-related events. Insurers are focusing on enhancing their risk assessment models to better predict and mitigate losses from natural disasters. The industry is leveraging advanced technologies like AI and machine learning to analyse vast amounts of data and improve underwriting accuracy.

One significant trend is the shift towards proactive risk management, where insurers work closely with policyholders to implement preventive measures and reduce potential damages. This includes promoting the use of resilient building materials, encouraging sustainable practices to minimise environmental impact, and looking at nature based solutions.

Additionally, there is a growing emphasis on climate scenario analysis, with insurers stress-testing their portfolios against various climate-related risks. Regulatory bodies are also increasing scrutiny, pushing insurers to adopt more stringent measures to ensure financial stability in the face of escalating climate threats.

Unfortunately the rise in climate-related claims has led to higher premiums and a re-evaluation of coverage options. So insurers are exploring innovative solutions, such as parametric insurance, which provides quicker payouts based on predefined triggers like weather conditions.

Overall, the climate insurance landscape in 2025 is characterised by a proactive, data-driven approach aimed at enhancing resilience and sustainability in the face of growing climate challenges.

Q. How would you define your approach/ philosophy to climate risk?

My approach to climate risk in the parametric insurance sector is one that balances incremental adjustments with bold innovation. While incremental adjustments allow for continuous refinement and improvement of existing models, we believe that the current climate crisis demands a fundamental reimagining of how the insurance industry operates and designs risk tools.

In this rapidly changing environment, traditional insurance models alone are insufficient to address the growing frequency and severity of climate-related events. Parametric insurance, with its predefined triggers and swift payouts, offers a more agile and responsive solution to emerging risks. By leveraging advanced technologies such as AI and machine learning, we can analyse vast datasets to identify patterns and trends, enabling more accurate risk assessments and customised solutions.

We cannot forget a proactive approach to risk management, where insurers collaborate with policyholders to implement preventive measures and promote resilience. This includes supporting sustainable practices, investing in resilient infrastructure, and fostering community-level initiatives.

Ultimately, my philosophy has always been one of embracing dynamic adaptation and forward-thinking innovation. We must embrace new paradigms and integrate cutting-edge technologies to create a more resilient and sustainable future for the insurance industry and society as a whole. For me this is not just an adjustment—it is a transformation.

Top 3 Information Gaps in Climate Risk 

Talking as a parametric insurance practitioner, I can identify three critical information gaps in climate risk that need to be addressed:

Localised Climate Data: One of the most significant gaps is the lack of granular, localised climate data. While global climate models provide valuable insights, they often fail to capture the nuances of regional and local climate patterns. This gap hinders accurate risk assessment and the development of tailored insurance products that can effectively address specific climate-related risks in different areas.

Impact of Compound Events: Another crucial information gap is understanding the impact of compound climate events, such as the simultaneous occurrence of heatwaves and droughts or the combination of heavy rainfall and storm surges. These compound events can exacerbate the overall impact, leading to more severe damages. However, current models and data often do not adequately account for these interactions, making it challenging to predict and mitigate their effects.

Socioeconomic Vulnerability Data: Lastly, there is a need for comprehensive data on socioeconomic vulnerabilities. Climate risk is not solely determined by physical hazards but also by the vulnerability and adaptive capacity of affected communities. Detailed information on factors such as population density, infrastructure resilience, and economic dependencies is essential for accurately assessing and managing climate risk.

Addressing these information gaps is crucial for developing more effective and responsive parametric insurance solutions that can better protect communities and businesses from the growing threats of climate change.

Q. Do you interact with the following stakeholders: regulators, local governments, and investors? And if so, in what capacity and on what problems?

In my role I currently do not interact directly with stakeholders such as regulators, local governments, and investors. However, these stakeholders are crucial for the development and implementation of effective climate risk strategies. Collaboration with these entities can drive the adoption of mandatory climate risk disclosures, innovative pricing models, climate-resilient building codes, and equitable accessibility measures. Such partnerships ensure comprehensive risk assessment, enhanced resilience, and sustainable solutions, ultimately benefiting communities and businesses. Engaging with these stakeholders is vital for creating a robust and responsive framework to address the multifaceted challenges posed by climate change.

Top 3 Insurance Solutions Best Placed to Bridge the Climate Insurance Protection Gap

There are many insurance solutions that are being utilised to bridge the climate insurance protection gap. For me, the following are vital:

Parametric Insurance: This innovative solution offers predefined payouts based on specific triggers, such as weather conditions or seismic activity. It provides swift financial relief, enabling quicker recovery and reducing the economic impact of climate-related events.

Catastrophe Bonds (Cat Bonds): These financial instruments transfer risk from insurers to investors. In the event of a catastrophe, the bondholders bear the loss, providing insurers with the necessary funds to cover claims. Cat Bonds enhance the industry's capacity to manage large-scale climate risks.

Public-Private Partnerships (PPPs): Collaborations between governments and insurers can create comprehensive risk management frameworks. PPPs can facilitate the development of affordable insurance products, promote resilience-building initiatives, and ensure equitable access to coverage for vulnerable communities. This is an area I am particularly focused on.

The Catastrophe Insurer

Q. How are you thinking about climate insurance in 2025? 

Climate insurance will be tremendously important in 2025, especially with the recent policy reversals we have seen under the new presidential administration, such as pulling out of the Paris Agreement and rolling back EPA standards. The administration has also expressed interest in fundamentally overhauling FEMA, which puts the NFIP, the country’s largest flood insurance provider, in jeopardy. 

This undoing of longstanding climate policy will result in the removal of guardrails that were previously in place to protect and support consumers. With those gone, climate insurance will be more important than ever to maintaining normalcy for Americans. 

As carriers continue to exit climate-vulnerable markets, it’s also going to be essential for businesses and homeowners to create a plan covering how they can get and keep insurance coverage. At the same time, local governments increasingly have a responsibility to work with private insurers to create new products and financial models to strengthen the relationship between public and private sectors as it relates to climate insurance and extreme weather in vulnerable communities.

Q. How would you define your approach/ philosophy to climate risk?

Ric is tackling climate risk from the incremental perspective and the big picture point of view.

As a start-up that creates micro-parametric insurance solutions, we have the potential to make incremental differences in people’s day-to-day lives. Our policyholders’ ability to get a $10,000 payout within 48 hours of a loss means they get immediate relief post-disaster and can set a strategic recovery plan for themselves while they are waiting for their traditional insurance to kick in. This is especially important as extreme weather events are increasing in frequency and severity. While it may not seem like much, that $10,000 can make a big difference in how effectively a family, business, or community is able to recover post-disaster. 

From a big picture perspective, Ric is also participating in the fundamental reimagining of the insurance industry and how it addresses climate change. As a board member for InnSure, a nonprofit reimagining climate change-related insurance and risk financing, I regularly lead conversations about the role of parametric products in community-based insurance and the significant impact it has on the recovery time of communities. 

Top 3 Information Gaps in Climate Risk

The top three information gaps in climate risk are extreme rainfall, extreme heat, and the protection gap.

Many businesses and homeowners have not been able to create plans that successfully address extreme rainfall. As the Earth continues to warm, it will become a more prevalent issue, even in communities that have not previously experienced it. A prime example of this was when Hurricane Helene hit Asheville. Because the city is more inland, it’s traditionally considered 'less likely' to be impacted by hurricanes. However, the air is also warmer inland, allowing water to quickly evaporate and create heavy rainfall. The inability to address extreme rainfall in these vulnerable areas poses a major threat to the local economies and infrastructure, and the residents who often are not aware they are exposed to this risk. 

Extreme heat is another key gap. Because it’s a newly growing risk, we don’t have enough information on how it impacts infrastructure. We have projections of how extreme heat will affect the grid, but there is still a knowledge gap around the types of products needed to address the problem and who needs them the most. 

The protection gap also requires more research. We know how much the insured losses are since that’s a vital metric for carriers, but we still don’t know what the uninsured losses are. The protection gap also isn’t well quantified in terms of the financial loss at a household level across perils long-term. Many of the pre-existing modeling tools don’t get that granular. 

Q. Do you interact with the following stakeholders: regulators, local governments, and investors? And if so, in what capacity and on what problems?

Ric interacts with all three stakeholders: regulators, local governments, and investors. 

Insurance has emerged as part of the solution to close the extreme weather protection gap in communities. On the regulator side, Ric is working to help regulators understand how these disasters are impacting vulnerable consumers and what pathways exist for introducing protective parametric insurance solutions. 

Local governments recognise the need for strategic resiliency plans that strengthen their communities and protect their tax base. Ric works with localities to help figure out where parametric insurance products could be integrated into their resiliency planning and fortify their communities against future extreme weather events.

Investors know there is a prime opportunity for innovation in the insurance market. With a likely decrease in federal support for extreme weather disaster relief, a gap is emerging that the private market can fill in. Traditional insurance struggles to address the current protection gap, but parametric insurance stands out due to its rapid payouts. As a result, investors are turning to organisations like Ric for innovative solutions. 

Top 3 Insurance Solutions Best Placed to Bridge the Climate Insurance Protection Gap 

Parametric insurance, total cost of risk modeling, and new risk financing organisations are the insurance solutions Ric is watching to close the protection gap.

Parametric insurance has emerged as a necessary solution in addressing extreme weather events. It not only offers rapid payouts but it’s also more effective for high-impact catastrophes. While traditional insurance is better suited for frequent, smaller events, the recent low frequency, high-impact disasters that are spread out over longer periods align more closely with the strengths of parametric insurance. 

Total cost of risk simulators are also fascinating solutions. InnSure is developing one that dynamically calculates the full spectrum of risk impacts on people, assets, and communities across various scenarios. These simulators are crucial because the true cost of catastrophic events on household and local government budgets is not often reflected in risk pricing or insurance products. 

New risk financing organisations, like GreenieRE, are another interesting emerging solution. Since they are operating as a nonprofit, they are creating a new set of standards and guidelines for risk transfer financing, which will be crucial in conversations with local governments, regulators, and other key stakeholders. 

The Disaster Risk Financing Programme

Q. How are you thinking about climate insurance in 2025? 

​In 2025, the Centre for Disaster Protection will continue to prioritise supporting vulnerable communities facing escalating climate risks. The increasing frequency and severity of climate-induced events highlight the urgency for effective disaster risk financing. Traditional aid funding often falls short during extreme weather years, leaving vulnerable populations at heightened risk. Pre-arranged financing mechanisms, which include climate risk insurance, offer timely and predictable support, enabling rapid response and recovery.​

However, challenges persist in making climate insurance accessible and affordable, particularly in low-income countries. Complexity and cost barriers hinder widespread adoption. To address these issues, reforms are needed to enhance the affordability and transparency of pre-arranged financing solutions. The High-Level Panel on Closing the Crisis Protection Gap, convened by the Centre, has called for a ten-fold increase in pre-arranged crisis finance by 2035, emphasising the need for tailored, adaptable solutions that focus on equity and inclusivity. The Panel's recommendations also highlight the importance of leveraging insurance and capital markets to protect public assets and transfer financial risks. ​

Addressing the urgent need to support vulnerable communities in 2025 involves enhancing disaster risk financing strategies, reforming climate insurance frameworks, and fostering global partnerships to build resilience against escalating climate threats.



Q. How would you define your approach/ philosophy to climate risk?

Our approach is rooted in the importance of pre-arranged finance - ensuring that funding is in place before disasters strike so that responses are faster, more effective, and more equitable. Rather than fundamentally reimagining the insurance industry, the focus should be on strengthening the core principles of disaster risk financing: ensuring high-quality financial instruments, improving accessibility, and making sure that both 'money in' (financing arrangements) and 'money out' (effective and timely disbursement) work efficiently for those who need it most.

By refining and scaling proven financial tools - such as risk pools, parametric insurance, and contingent credit - while addressing gaps in accessibility and efficiency, we can ensure that vulnerable communities receive support when and where it matters most.

Top 3 Information Gaps in Climate Risk 

Impact Information - A major gap in climate risk data is the lack of detailed impact information, particularly in low-income communities where vulnerabilities are highest. Without localised, real-time data on how disasters affect livelihoods, infrastructure, and social systems, response efforts can unfortunately remain reactive rather than proactive.

Reliable data - The lack of reliable, high-quality data on hazards, particularly in regions like sub-Saharan Africa, where extreme weather events such as floods are becoming more frequent and severe. Many countries struggle with insufficient monitoring infrastructure, outdated hazard models, and fragmented data systems, making it difficult to predict, prepare for, and respond to disasters effectively.

Gender-disaggregated insights - This data gap effectively limits disaster financing for women and girls. Legal and societal barriers often restrict women’s access to financial aid, yet data on these challenges remains scarce. Women are also excluded from decision-making in climate resilience planning, despite being disproportionately affected. Additionally, climate disasters hit women’s livelihoods hardest, particularly in agriculture and informal economies, but data gaps hinder fair recovery efforts. Closing these gaps is essential to ensuring disaster financing systems are equitable and accessible to those most at risk. 

Q. Do you interact with the following stakeholders: regulators, local governments, and investors? And if so, in what capacity and on what problems? 

The Centre works closely with its clients, including, governments, INGOs, and UN agencies to help them plan, prepare, and pay for disasters more effectively. While we do not directly engage with regulators, local governments, or investors as primary stakeholders, our work often intersects with these groups through the solutions we design and the policies we advise on.

By providing technical expertise and impartial advice, we support our partners in navigating these challenges - helping them secure more predictable, timely, and effective financing that enables early action and strengthens resilience.

Top 3 Insurance Solutions Best Placed to Bridge the Climate Insurance Protection Gap

Parametric insurance solutions - The Centre advocates for innovative financial solutions that ensure rapid and effective responses when disasters strike. Parametric insurance plays a crucial role in this approach, offering pre-agreed payouts based on specific triggers like extreme weather events, rather than waiting for lengthy damage assessments. However, insurance alone is not enough. That’s why we emphasise a holistic approach that includes ‘money out’ solutions - ensuring that once funds are released, they reach those in need quickly, efficiently, and equitably. 

Putting people at the heart of solutions - Traditional insurance often prioritises physical assets like buildings and infrastructure, but true resilience means protecting people first. I would like to see more solutions that focus on lives and livelihoods, ensuring that disaster risk financing directly supports individuals, families, and communities in rebuilding and recovering. For example, extreme heat insurance can provide payouts to outdoor workers when temperatures exceed safe thresholds, helping them cope with lost wages and medical costs. Similarly, heatwave-triggered insurance for vulnerable populations can also take a role in supporting other response efforts, such as cooling centres, medical aid, and community resilience programmes.

Insurance-linked to ‘money-out’ solutions – To maximise impact, insurance must be designed with clear, pre-planned mechanisms for getting funds to those who need them most. Insurance-linked to 'money-out' solutions ensures that payouts are rapidly distributed through existing financial networks, such as mobile cash transfers, community funds, or government social protection programs. For example, drought insurance tied to emergency cash assistance can provide immediate relief to farmers before food insecurity worsens, while flood-triggered insurance can fund direct payments to affected households for urgent recovery needs. By embedding insurance within efficient financial delivery systems, we can work to make responses more timely and predictable for those who need support most.

The Renewable Energy Insurer

Q. How are you thinking about climate insurance in 2025?

In 2025, climate insurance is evolving from reactive coverage to a strategic risk management partner for renewable energy. The insurance industry has become the early warning system for climate change's impact on renewable energy.

After another year of severe hail losses, insurers are recalibrating their approach to extreme weather risk. We are seeing a market bifurcation develop - vulnerable assets face rising rates, higher deductibles, and reduced sub-limits, while resilient projects are rewarded with better terms.

Asset resilience isn't just about geography anymore. The Texas hail events from March and April last year saw neighboring sites receive varying levels of damage based on the sites’ preparation and stow protocols. Prepared assets should be receiving favorable terms from their insurers.

2025 will be defined by how we adapt to this new reality. Last year was the hottest year on record, paired with some of the most severe extreme weather events we have ever seen. The industry will need unprecedented collaboration between manufacturers, researchers, brokers, carriers, and asset owners as we all work towards the same goal: ensuring the long-term viability of the clean energy transition - and saving our planet.

Q. How would you define your approach/ philosophy to climate risk?

This is a moment that calls for a fundamental rethinking of how the insurance industry assesses climate risk. Traditional models were built on historical data that no longer reflects the realities of today’s climate, particularly for renewable energy assets that are exposed to increasing volatility. The challenge isn’t just about making incremental adjustments—it’s about ensuring that risk tools are evolving in step with the energy transition itself.

A more data-driven approach is essential. The industry has more access than ever to performance and loss data from renewable assets, and integrating this information into underwriting and risk assessment can lead to more accurate pricing and stronger protections. At the same time, resilience measures—whether in the form of better project siting, structural reinforcements, or financial risk transfer—need to be incorporated into how risk is evaluated and incentivised. The industry has an opportunity to play a proactive role in supporting the transition to a cleaner and more resilient grid, and the choices made today will shape its long-term sustainability.

Top 3 Information Gaps in Climate Risk

Long-term climate projections: There's a critical mismatch between the tools available and the lifetime of renewable equipment. We lack accurate long-term models showing how hurricane paths, hail-prone areas, and flood zones will shift due to climate change over the 25-30 year lifespan of renewable assets.

Transparency across stakeholders: We need greater data transparency for all industry stakeholders, including owners, operators, investors, insurers, and vendors. More comprehensive data flowing through the system enables more accurate risk assessment, with benefits seen across the entire value chain.

Resiliency cost-benefit: We lack macroeconomic models that accurately calculate the cost of investing in asset resilience versus the long-term benefits over a 30-year period. 

Real-time weather alerts: We need more accurate, real-time models predicting the interaction of hail and wind direction in weather forecasts. This would allow asset owners to proactively stow solar modules away from the wind to minimise damage. 

Q. Do you interact with the following stakeholders: regulators, local governments, and investors? And if so, in what capacity and on what problems?

Our stakeholder ecosystem extends beyond just owners, lenders, brokers, insurers, and reinsurers in the renewable energy space. We have received Department of Energy grants to develop tools that can help developers better site projects to account for climate risk, and understand the equipment types that will be necessary for their chosen geographic location. The end goal of this project is to develop an insurance price signal for resilient assets. 

Although we don't directly engage with local governments, the building codes and standards they issue do influence our underwriting. 

‍Top 3 Insurance Solutions Best Placed to Bridge the Climate Insurance Protection Gap

Property insurance for low-carbon infrastructure 

Bankability (solar revenue put, wind proxy hedge, warranty, revenue firming products) insurance to support infrastructure investors

Parametric insurance to protect communities and inject cash quickly into communities impacted by extreme weather impacts 

The Insurtech

Q. How are you thinking about climate insurance in 2025? 

I think there's only one way for it to go. It's going to be more expensive, more time consuming for people to understand, and there's going to be way more innovation.

As the climate changes, industries need to change, and insurance is one of the industries that everyone relies on pretty consistently, even if you don't truly know it. So, when we think about the fact that the climate is changing so rapidly, we know insurance is going to have to change, whether that be with more people investing with parametric policies, or companies using more strict and pronounced climate data. All the way to not being able to have insurance in different areas because we are not fast enough on the innovation side. 

Q. How would you define your approach/ philosophy to climate risk?

I always talk about the fact that insurance as a whole has been using traditional climate models for a really long time and it's worked. We forget the fact that it's actually been really profitable for a really long time to simply use these climate models. It's only in the last decade or so where climate has been changing so rapidly that these tools are now failing us because we cannot innovate fast enough and improve these tools fast enough or account for as much climate change data because it throws all of our models out of whack. It throws a lot of our traditional modeling science into disarray because it's changing so rapidly and there's all these different variables that we have never had to account for. So, I think a part of this is going to be, in terms of redefining climate risk, is going to be making these smaller adjustments in just how we think about climate tools.

It's no longer a one size fits all solution. It has to be something that's much more specific to the properties we are trying to underwrite and to the policies we are trying to offer to people in a given area. But I think, ultimately, those small adjustments will amount to something much greater, which is the fact that we need to be more hyper specific in the way that we underwrite. We haven't really needed to be as efficient as we need to be now, not until the last couple years.

Top 3 Information Gaps in Climate Risk 

I think one of the things is that people think we are gathering way more information than we actually are.

Most climate models are just using weather data to understand whether or not a disaster is likely to happen in a given area, but you assume that they are using property data and infrastructure and all these other things. I think people don't really understand that. I think another big thing that people don't understand is that these models can be completely different from company to company.

I read a Bloomberg article that was cited quite a few times over the last couple of years that basically compared the biggest climate models in the data and insurance space, and they only overlapped 25 percent of the time. So, when you think about the fact that millions and millions of people all over the world, billions of people all over the world, are being underwritten and charged based on models that only overlap, a quarter of the time, that’s a pretty scary thought. A pretty interesting thought. I would say another thing in climate risk that I wish more people understood was this idea that you can actually do things to reduce the risk on your property. It's not just the insurance company that is in charge of letting you know those things.

It's also something that the homeowner needs to focus on if they are in an area that is particularly high risk. There's very specific things all the way from clearing debris off of your gutters to making things more sustainable energy wise, there's all these things, but this is the top three for me.

Q. Do you interact with the following stakeholders: regulators, local governments, and investors? And if so, in what capacity and on what problems? 

We typically just interact with insurers. So we have had a little bit of conversation with regulators and local governments. We actually started in local governments, working with homeowners and grant reimbursement organisations.

What we found is that we actually need something that's much larger than a traditional kind of regulatory environment. We need something that creates more positive incentives for people. So what I mean by that is insurance is something everyone relies on, and everyone pays into, and so therefore, we need to help people stay aligned with the fact that if they reduce the risk on their property, they can get lower insurance. Versus governments, there's grants that they can give people, but there's not really any follow up, and we would need to uproot a lot more of our current society based off of the way our government runs to achieve the same level of difference there.

Top 3 Insurance Solutions Best Placed to Bridge the Climate Insurance Protection Gap

I like to think that solutions like FORA are best placed to bridge that gap. We focus on not only giving insurance companies benefits, but also for the policyholder, giving them the things they need to reduce their risk and qualify for insurance benefit. There's also other insurance solutions like parametric insurance that are really useful for people that just need a quick payout to get themselves back on their feet. They don't have to worry about staying in an Airbnb or in a hotel while their home is being rebuilt. So, parametric solutions, once people understand them, are going to be really, really crucial moving forward. And then I also think more natural disaster resource partnerships within insurance. I think it's really crucial. There's companies that partner with insurers and are funded by insurance companies. That will go out as kind of  natural disaster resource groups. I believe it's called Wildfire BBQ or something like that. There's a barbecue where a volunteer organisation goes out after a disaster and just cooks for people. And they are funded by a lot of insurance companies and data providers. I think initiatives like that are really useful. 

The Insurance Public/ Private Partnership

Q. How are you thinking about climate insurance in 2025?

In 2025, our perspective on climate insurance is firmly rooted in its critical role as a resilience tool and a vital community shock absorber. We see it moving beyond a reactive disaster response mechanism to become a proactive instrument for building resilience and reducing risks at the individual, community, and national levels. The Insurance Development Forum (IDF) is instrumental in driving this shift by integrating insurance into broader financial strategies, ensuring that resources are available for both early action to prevent losses and rapid response when shocks do occur.

A powerful illustration of this is the recent launch of the US$9.25 million macroinsurance policy for Syria. This initiative exemplifies how insurance acts as a community shock absorber, providing a pre-arranged financial safety net that triggers in the event of drought in key food production areas. This allows the World Food Programme (WFP) to quickly support vulnerable populations, mitigating the potentially devastating impacts of food insecurity. As climate shocks intensify, our focus in 2025 is on scaling these impactful efforts, fostering stronger public-private collaboration, and developing innovative risk transfer solutions. Our goal is to ensure that climate insurance effectively protects lives and livelihoods, acting as a cornerstone of resilience for communities facing increasing climate-related threats.

Q. How would you define your approach/ philosophy to climate risk?

This is not a time for incremental adjustments - it is a moment for fundamental rethinking. The IDF sees insurance as a catalyst for resilience, not just a financial safety net. Traditional crisis finance is reactive and inefficient. We are driving a shift towards pre-arranged financial protection through mechanisms like disaster risk reduction, parametric insurance, and blended finance. Our focus is on designing scalable, data-driven solutions that enable governments, businesses, and communities to prepare for, rather than react to, climate shocks.

Top 3 Information Gaps in Climate Risk

Granular risk data – Many vulnerable regions lack high-quality climate risk modelling, limiting effective insurance design.

Economic impact data – Understanding long-term economic losses from climate shocks is crucial for better financial planning.

Resilience impact measurement – More data is needed on how risk financing improves recovery and long-term adaptation.

Q. Do you interact with regulators, local governments, and investors? And if so, in what capacity and on what problems? 

Yes, across multiple areas. With regulators, we engage in regulatory frameworks for insurance innovation. With governments, we co-develop risk transfer solutions, in partnership with development agencies, supporting climate-vulnerable communities. With investors, we are advancing initiatives to channel insurance-sector capital into climate-resilient projects.

Top 3 Insurance Solutions Best Placed to Bridge the Climate Insurance Protection Gap

Parametric insurance – Fast, transparent payouts linked to climate triggers, already deployed in Ghana and Mexico.

Risk Engineering –  Resilience is not just about bouncing back after a shock; it's also about reducing the severity of those shocks in the first place; the industry needs to highlight this service and highlight its long-term investment in sustainability and risk reduction. 

Blended finance models – Combining public and private capital to scale climate risk solutions, as seen in the Integrated Disaster Risk Management Alliance (IDRIMA).